Enterprise Plans Should Be Priced at a 10-20x Premium

A common and costly mistake SaaS founders make is underpricing their enterprise plan. Founders, especially those with a technical background, often anchor their pricing to what they would personally pay, failing to grasp the different buying dynamics and value calculations of large organizations.

Why Enterprise is Different:

Selling to enterprise customers is fundamentally different from selling to SMBs or individuals. The process involves:

• High-Touch Sales: Multiple demos, calls, and meetings are required.
• Procurement Hurdles: Navigating legal reviews, security audits, and complex procurement processes.
• Custom Needs: Often require custom integrations, dedicated support, and service-level agreements (SLAs).

These activities are expensive and time-consuming. If your enterprise tier is not priced high enough, you will lose money on every enterprise customer you acquire.

The 10-20x Rule of Thumb:

A loose but effective rule of thumb is to price your enterprise plan at 10 to 20 times the price of your standard or most popular self-service plan.

• If your standard plan is $100/month, your enterprise plan should start at a minimum of $1,000-$2,000/month.
• If you are only charging 2-3x more, you will not have the margin to afford the dedicated sales and success resources required to serve the enterprise market effectively.

Enterprise customers are not just buying software; they are buying a solution that includes a higher level of service, security, and partnership. The price must reflect this comprehensive value, not just an incremental increase in features.

Tags: #SaaS #pricing #enterprise #sales #strategy #monetization