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That's a much more generous take than I had. I always assumed "contact us" pricing meant "tell us who you work for so we can google their funding level before s

That's a much more generous take than I had. I always assumed "contact us" pricing meant "tell us who you work for so we can google their funding level before suggesting a price to you".

Bilal_io 4y ago
I am sure that's the correct assumption for some companies. I don't think it's right regardless how big the customer. But there are always exceptions, the size of your customer's business may affect your effort for onboarding and continues support, and therefore you may charge them different.
jabroni_salad 4y ago
That's definitely true... I mainly service financial institutions and their asset size is part of the calculation.
cj 4y ago
Whether or not your company has a procurement department should always be part of the equation when pricing enterprise deals. (Funding is an indicator of whether your company has one) Smaller companies without procurement departments are quicker and faster to contract with and they pay on time. Bigger companies with procurement departments request last minute contract redlines and never pay on time (always at least 2 weeks late, as a rule of thumb). “Contact us” pricing might benefit you if you are smaller. If you’re at a bigger company, the headache of dealing with your procurement department will inevitably (and justifiably) drive up the price - it’s the bureaucracy tax.
- jedberg 4y ago
  > always at least 2 weeks late, as a rule of thumb Oh man! As consultant I hated that. They would pay 90 days late and just say "sorry, we always pay 90 days after we get the invoice". They know I don't have the resources to sue them, nor would I. And they really had no reason to hold it other than making sure they get the interest instead of me. Sure maybe it takes a few days to validate the invoice, but 90 days was ridiculous. Even worse was when I was on the corporate side. I was working with a small vendor and our company had a 90 day wait as policy, but the company refused to deliver the items until they got the money. I really needed the items, so I have to move mountains to get our procurement to cut a check ASAP.
  - chasd00 4y ago
    if the contract your client signed said net-30 then wouldn't a 90 day payment incur 60 days of late fees and another invoice? i feel like you could rinse/repeat that forever. It would be like a subscription to late fees.
    - kube-system 4y ago
      If a customer is paying you late because they think you won't/can't do anything about it, it seems the same disregard could apply to their payment of late fees.
      - ganoushoreilly 4y ago
        Sometimes, they'll go as far as stiffing your payment just because.. what are you going to due, sue a Global 100 entity? It's absurd, that's why I like working with smaller companies.
        propogandist 4y ago
      - WastingMyTime89 4y ago
        I mean they will pay them if you escalate to legal but you won’t be able to do business with them again.
      - yellowapple 4y ago
        You'd think "suspend service until outstanding invoices are paid in full" would be in the "things which you would/can do about it" category.
      - chasd00 4y ago
        If it’s low effort just keep sending in invoices. You could even write a script to help. The data entry person puts them on an A/R which gets larger and larger as each payment is not made and the past due rolls to the next invoice. Eventually the over 90 A/R will get attention. It’s a lot of effort to keep going so it may just be more hassle than it’s worth. On the other hand, nothing wrong with that process if you’re within the terms of the contract. When the number gets large enough it will get escalated and, when you show your work, get paid and the payment clerk will get their hand slapped.
- shrubble 4y ago
  Most companies pay very quickly if you offer 1% Net 10 or 2% Net 10 terms. Paying within 10 days to get a 2% discount is pretty money-efficient from their standpoint.
  - seanp2k2 4y ago
    Then just price in a 10% overhead for your service of dealing with this game.
  - Silhouette 4y ago
    I also recommend this. It seems that some accounts departments are authorised to play absurd games with long delays but they aren't authorised to cost the company more money. They will complain about late fees but everyone likes a discount, right?
colinmhayes 4y ago
Price discrimination is good actually. Why shouldn't you charge the fortune 500 company more than the cash strapped start up? Good for your business, and lets you sell to the startup for less and still have the same revenue.
indymike 4y ago
As a reformed former VP of Sales, I can assure that this is exactly how it works, except with much better research than Google.
- thrwyoilarticle 4y ago
  Could you describe some of the research?
tevon 4y ago
This is real too. Prices are never fixed, was one of the first things I learned form my GSBer cofounder. In the "regular" world, the price is usually the price. In the business world it almost never is
stubish 4y ago
Oh, it doesn't always mean personalized price gouging. My take was always simply that the product is overpriced to the point the vendor needs to employ a full time salesperson to make you want it. I think that was why I've always avoided making those calls. Not only did I know I was going to be annoyed, I was going to have to pay to be annoyed. "contact us" pricing was always the last option to try, especially from the well known brands.
e-clinton 4y ago
Same thought here. If I see “contact us” for pricing, it means you’re gonna try and screw me over somehow. I usually avoid those even when I have a large budget. …hell, if I have to speak to a human when I don’t think it’s necessary, then we probably won’t do business.

That's a much more generous take than I had. I always assumed "contact us" pricing meant "tell us who you work for so we can google their funding level before suggesting a price to you".

Bilal_io 4y ago

I am sure that's the correct assumption for some companies. I don't think it's right regardless how big the customer. But there are always exceptions, the size of your customer's business may affect your effort for onboarding and continues support, and therefore you may charge them different.

jabroni_salad 4y ago

That's definitely true... I mainly service financial institutions and their asset size is part of the calculation.

cj 4y ago

Whether or not your company has a procurement department should always be part of the equation when pricing enterprise deals. (Funding is an indicator of whether your company has one) Smaller companies without procurement departments are quicker and faster to contract with and they pay on time. Bigger companies with procurement departments request last minute contract redlines and never pay on time (always at least 2 weeks late, as a rule of thumb). “Contact us” pricing might benefit you if you are smaller. If you’re at a bigger company, the headache of dealing with your procurement department will inevitably (and justifiably) drive up the price - it’s the bureaucracy tax.

jedberg 4y ago
> always at least 2 weeks late, as a rule of thumb Oh man! As consultant I hated that. They would pay 90 days late and just say "sorry, we always pay 90 days after we get the invoice". They know I don't have the resources to sue them, nor would I. And they really had no reason to hold it other than making sure they get the interest instead of me. Sure maybe it takes a few days to validate the invoice, but 90 days was ridiculous. Even worse was when I was on the corporate side. I was working with a small vendor and our company had a 90 day wait as policy, but the company refused to deliver the items until they got the money. I really needed the items, so I have to move mountains to get our procurement to cut a check ASAP.
- chasd00 4y ago
  if the contract your client signed said net-30 then wouldn't a 90 day payment incur 60 days of late fees and another invoice? i feel like you could rinse/repeat that forever. It would be like a subscription to late fees.
  - kube-system 4y ago
    If a customer is paying you late because they think you won't/can't do anything about it, it seems the same disregard could apply to their payment of late fees.
    - ganoushoreilly 4y ago
      Sometimes, they'll go as far as stiffing your payment just because.. what are you going to due, sue a Global 100 entity? It's absurd, that's why I like working with smaller companies.
      - propogandist 4y ago
    - WastingMyTime89 4y ago
      I mean they will pay them if you escalate to legal but you won’t be able to do business with them again.
    - yellowapple 4y ago
      You'd think "suspend service until outstanding invoices are paid in full" would be in the "things which you would/can do about it" category.
    - chasd00 4y ago
      If it’s low effort just keep sending in invoices. You could even write a script to help. The data entry person puts them on an A/R which gets larger and larger as each payment is not made and the past due rolls to the next invoice. Eventually the over 90 A/R will get attention. It’s a lot of effort to keep going so it may just be more hassle than it’s worth. On the other hand, nothing wrong with that process if you’re within the terms of the contract. When the number gets large enough it will get escalated and, when you show your work, get paid and the payment clerk will get their hand slapped.
shrubble 4y ago
Most companies pay very quickly if you offer 1% Net 10 or 2% Net 10 terms. Paying within 10 days to get a 2% discount is pretty money-efficient from their standpoint.
- seanp2k2 4y ago
  Then just price in a 10% overhead for your service of dealing with this game.
- Silhouette 4y ago
  I also recommend this. It seems that some accounts departments are authorised to play absurd games with long delays but they aren't authorised to cost the company more money. They will complain about late fees but everyone likes a discount, right?

colinmhayes 4y ago

Price discrimination is good actually. Why shouldn't you charge the fortune 500 company more than the cash strapped start up? Good for your business, and lets you sell to the startup for less and still have the same revenue.

indymike 4y ago

As a reformed former VP of Sales, I can assure that this is exactly how it works, except with much better research than Google.

thrwyoilarticle 4y ago
Could you describe some of the research?

tevon 4y ago

This is real too. Prices are never fixed, was one of the first things I learned form my GSBer cofounder. In the "regular" world, the price is usually the price. In the business world it almost never is

stubish 4y ago

Oh, it doesn't always mean personalized price gouging. My take was always simply that the product is overpriced to the point the vendor needs to employ a full time salesperson to make you want it. I think that was why I've always avoided making those calls. Not only did I know I was going to be annoyed, I was going to have to pay to be annoyed. "contact us" pricing was always the last option to try, especially from the well known brands.

e-clinton 4y ago

Same thought here. If I see “contact us” for pricing, it means you’re gonna try and screw me over somehow. I usually avoid those even when I have a large budget. …hell, if I have to speak to a human when I don’t think it’s necessary, then we probably won’t do business.