Cost based pricing · PricingSaaS

#2-pricing-questions
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IMPORTED FROM SKOOL
Original Post was posted by Nikhil D on Aug '24

We are a metadata company. The below is regarding enterprise customers with a lot of future revenue potential for whom we follow custom pricing. (For SMBs, we follow a standard pricing with no customization)

We follow a land and expand strategy by solving for the basic jobs (JTBD) with cost based pricing since a lot of competition exists and then get to value based pricing as we solve for other set of jobs where there is not much of competition

The challenge we face is that there are many aspects … See more

2

Ulrika0Lehrskov-Schmidt • Aug '24

Hi Nikhil

You have two aspects here:

  1. Determining what the cost is

  2. Putting it into a model the customer is willing to pay for.

DETRMINE COST:

Trying to account for costs in a precise and robust manner is practically impossible. There are too many variables, they change too much and there is no clear way to do cost attribution from a core cost center (e.g. base cost of 3rd party license) to the individual customer.

In my view traditional cost accounting and CFO mindset of precision is ‘perfection’… See more