Lacking market comparables, Nexla priced its initial enterprise deals by first understanding the customer's internal cost to solve the same problem. They then proposed a price that was a clear fraction—like one-fifth or one-tenth—of that internal cost, making the ROI immediately obvious and justifiable for the buyer.
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Initially, Microsoft's go-to-market strategy was not to displace competitors but to displace customers' own internal development teams. They framed their software's price as a fraction of a company's fixed in-house engineering budget, a powerful value proposition that defined a new category of B2B sales.
Most SaaS startups begin with SMBs for faster sales cycles. Nexla did the opposite, targeting complex enterprise problems from day one. This forced them to build a deeply capable platform that could later be simplified for smaller customers, rather than trying to scale up an SMB solution.
An ROI case isn't a one-time sales pitch; it's an ongoing conversation. Implement periodic 'value audits' to formally demonstrate the value your product has created. This builds internal evangelists and gives you tremendous power in future renewal or price increase discussions.
Don't let your personal perception of what's 'expensive' limit your earning potential. Set your price high based on the value you provide. It is easy to lower a price that gets no buyers, but impossible to know if you could have charged more if you start too low. Never say no for the customer.
To set your price, ask clients what they would do if your service didn't exist. Their answer, like hiring a full-time employee, reveals the 'replacement value.' This figure provides a concrete benchmark for your pricing and uncovers powerful marketing language.
Price objections don't stem from the buyer's ignorance, but from the seller's failure to establish clear economic value. Before revealing the cost, you must build a business case. If the prospect balks at the price, the fault lies with your value proposition, not their budget.
Discussing pricing early doesn't mean you're in the proposal stage. True proposal and negotiation begins only after you have secured explicit agreement on the problem, the solution, and from the key decision-maker. At this point, the deal would close if it were free; price is the only remaining variable.
Selling a small, cheap "land" deal to an enterprise customer is dangerous. When you try to expand, they will question the 10x price jump, making it nearly indefensible. Start with a price ($75k-$150k) that reflects enterprise value to avoid being trapped by a low initial anchor.
Effective pricing is not just a number; it is a value story. The ultimate test is whether a customer can accurately pitch your product's pricing and value proposition to someone else. This reframes pricing from a simple number to a compelling narrative.
Instead of hiding price until the end of the sales cycle, be transparent from the start. Acknowledge if your solution is at the high end of the market and provide a realistic price range based on their environment. This allows you to quickly qualify out buyers with misaligned budgets, saving your most valuable asset: time.
