Working out B2B SaaS licensing prices?
Hi folks - I run a small SaaS web app (alone) and have been approached by a company who want's to license the software from me. I offer a subscription tier to my existing B2C users at £15 per year, and this company has given me a figure for the number of users the'd likely want to offer it to. Most likely I'd give them a Cloud style setup, so this would all still run off my existing app install
My question is, how on earth do I go about quoting for something like that? We've agreed to look at integration and extra feature development costs separately from an annual licence fee, so I'm only thinking about their annual license fee here.
I'm trying to think of other SaaS platforms that offer a similar service - an embeddable app that's charged by number of users - but struggling to think of anything. Obviously, I'm worried about undervaluing my product/time, or overvaluing and scaring them off! Where do I start?
Try to determine how much money they would save with your product, also try to determine how much money you’d need to support an organization of a certain size. Businesses (certainly enterprises) have a lot more the spend than consumers.
I can think of several scenarios here:
Most companies requesting these, are looking for a stable player. They do not want to implement a new tool, which may go out of business a couple months into the contract. So price accordingly.
I've had good experience with setup 2 from my list. I'll give you a rough example on how I came up with my pricing here:
Regular product price/seat: $19/month
Customer wanted 20 seats: 20x$19 = $380/month = $3.800/year (since 2 months free if prepaid yearly)
What I ended up offering them was exactly that, but as a fixed rate with a yearly, auto-renewable contract:
20 seats x $19 * 12 for 10 months = $3.800
Additional seats would go on top for an extra $12/month (cheaper than the first 20 seats for $190).
Reason being, I priced my product what I think it's worth, and can't charge less to operate profitable. There is no point in lowballing yourself out of business. As far as custom work was concerned, I never charged for that, but extended the contract length accordingly.
Maybe a flat monthly fee?