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‘Call for Pricing’ is trending in SaaS – and that’s not good | diginomica

SaaS vendors are less transparent about their pricing today than they were just a few years ago. Why?

Given that SaaS companies don’t carry the same implementation and maintenance costs as old-school ERPs, pricing transparency should be a way for these businesses to stand out and compete in an already crowded field.

Curiously, the data does not bear this out. Increasingly, businesses are relying on a “call for pricing” model, even at the SMB level – a trend that doesn’t appear to be born of necessity but rather of a changing attitude in the tech industry.

In 2016, OpenView Labs conducted a study of 87 of the largest public and private SaaS vendors in the United States to evaluate which companies post their pricing online and what that says about their business model. More than half (55%) of the private businesses sampled – 33 SaaS unicorns including Dropbox, InsideSales, and Slack—hosted pricing information online. Only 28% of the 54 publicly traded companies posted theirs.

Some SaaS vendors do publish prices
One notable finding is that three-quarters of the SaaS companies that listed their prices in 2016 began doing so within five years of the survey (since 2011). It would seem that by 2016, pricing transparency had become a trend among even the largest SaaS businesses in America, especially with private vendors.

Private businesses post their prices more often because they are typically young, nimble companies that lead with straightforward cost models to grow their customer base. In many cases, these companies provide a tool (application or simple suite) rather than an entire, comprehensive business solution. As they scale and their solutions become more complex, these young companies tend to adopt a “call for pricing” model.

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‘Call for Pricing’ is trending in SaaS – and that’s not good.

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