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Estd 4.22.2023
Below is a concise answer based on our saas pricing book, Price to Scale:
• Enterprise revenue can be the engine behind your margins, but that doesn’t automatically mean self-serve plans should be eliminated. Keeping a low-end, self-serve option can be valuable for building brand awareness, driving user acquisition, and even serving as a feeder channel that, over time, might transition into larger deals.
• In Price to Scale we discuss how enterprise deals tend to have significant discounting and lower unit pricing—reflecting a higher volume of licenses or usage—whereas self-serve deals have a higher price per unit. This “volume discount” is expected in SaaS, and it’s important to recognize that each segment responds to different value propositions. Self-serve customers may be less profitable per seat but they can drive long-term revenue growth through scale and network effects.
• A common approach highlighted in our book is the “Good-Better-Best” packaging strategy. Here, you can tailor packages so that enterprise customers receive a highly customizable, consultative offering while self-serve customers access a streamlined, lower-cost plan that still delivers core value. This way, you ensure that low-end plans are intentionally designed rather than just distractions.
• The key is balance: Focus your resources and sales efforts primarily on high-margin enterprise deals while using well-structured self-served products to maximize market coverage and funnel potential enterprise leads. Clear segmentation and differentiated features help avoid any cannibalization while leveraging both channels strategically.
In summary, even if enterprise revenue is the backbone of your business, keeping a low-end self-serve option can broaden your market reach. The emphasis should be on designing each offering to suit its target segment, ensuring that your self-serve plan drives acquisition without distracting from enterprise success.