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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, the answer is yes—volume discounts play a key role when customers place large orders or have high usage levels.
Key points include:
• Customers naturally expect volume discounts when they use more of your service. As noted in our book, buying in higher volume (more licenses, higher usage) typically results in a lower unit rate, which is both accepted and anticipated in SaaS pricing. For example, larger deals might see unit prices drop considerably compared to smaller ones.
• The book highlights that while smaller (commercial) deals might incorporate discounting of up to 20–30%, larger enterprise deals can warrant more substantial discounts (up to 70–80% in some instances). This is a strategic move to delineate pricing tiers and acknowledge different customer segments.
• It is essential to segment your customer base and tailor discounting structures through creative strategies. Rather than offering blanket unilateral discounts, our book recommends pairing volume discounts with alternative offers that could include upgrades or add-ons—ensuring that price reductions come with committed usage or other conditions.
In summary, providing volume discounts for large or high-usage customers aligns with market expectations and our book's guidance in Price to Scale. This approach not only reflects the inherent logic of SaaS pricing but also helps establish optimized price points for different segments, ensuring both competitive pricing and profitability.