Pricing problem... Relatively cheaper compared to alternatives but causes concerns on customer side
Today, I made a call with one of our prospects and he asked why our product is $99/m while other similars start from $700/m and also gets commission from sales... I said it's meaningless to charge hundreds or thousands per month and also get a commission. I said we put a straightforward pricing and decided to play on the long tail side of the market. That's why it's $99/m I said. But then he said that this "cheap" pricing has caused a huge concern on the security side... What would be your answer to this question if you were me...
I would say to your customer, "What do you thik your extra dollars are buying for you?"
Once written, the code is the code is the code is the code. It may need occasional revisions to account for changes in the computing environment but, other than that, it just sits there.
We designed it from the start to scale so we can service hundreds of thousands of clients with ease.
Our infrastucutre is rented from specialists in the field. Computers are now so powerful and CDN is such an established part of the infrastructure that we can deploy cheaply and easily on the equipment we essentially outsource to our specialist provider.
So, other than code and paying for the ridiculously cheap, scaleable architecture, what do you want us to spend your money on?
A big skyscraper building in every major city like the banks do? Why do you want to pay for that?
An inflated staff with sixteen layers of management all adding costs with no measurable value? Why do you want to pay for that?
We don't need to pay for huge advertising campaigns either. You won't see us on TV because that is a stupid and expensive way to advertise our sort of service. We target niches on the internet because that is where we find our customers. And we tailor our advertisements and make careful, considered and effective judgements as to how we spend your money.
Think about the service we offer. You are buying our service to save money and to make money. You don't want to hose money at everything in sight. You want to make a smart, informed decision about where to place your business. Surely you expect us to make smart, informed business decisions too so that we can charge you less than our competitors?
Consider this: if we can make a decent profit out of charging you $99 a month and delivering a quality service, why can't our competitors do the same? Either they are so wasteful that they are hardly a good example of best business practice or they are greedy and see you as a mark, not a business partner.
Our business philosophy is simple. We offer a high quality service for a fair price because we believe that this is the best way to attract and retain customers. The costs of running an internet service are not high when compared to other types of business and we believe our prices should reflect that.
Cool, I really liked the pitch :)
Now to see it if works!
yikes...
https://www.cloudlock.com/blog/20-security-questions-to-ask-before-you-onboard-saas-vendor/
That's why you've got to charge $700/m to corporates, to cover the costs incurred in getting up to their required level of compliance