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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, the recommended approach for pricing enterprise features like Single Sign-On (SSO) is to treat them as add-on capabilities with a fixed or modular price rather than including them in the base software’s price. Here are some key points from our book:
• Capitalize on Capability Pricing: As described in our book, capability pricing involves charging a set fee for a distinct piece of software functionality. For an enterprise feature such as SSO, this allows you to clearly align the price with the value it provides without affecting the base adoption of your product.
• Avoid Lowering Enterprise Adoption: The book cautions against bundling critical enterprise features into a base price, as this can leave money on the table or even deter enterprise clients. Instead, pricing SSO as an add-on helps maintain the base product's attractiveness for a wider audience while addressing the specific needs of larger clients.
• Support Sales and Operational Alignment: A clear add-on pricing model simplifies conversations with enterprise customers. It provides transparency on what additional value they receive and aligns well with a pricing strategy that can evolve as the company's customer segments expand.
In summary, our approach in Price to Scale is to price enterprise features like SSO as separate, capability-based add-ons. This ensures you capture the extra value these features bring to more demanding enterprise customers while keeping your base pricing competitive and scalable.