What we do, however, know is that the difference in what any two customers will be paying is likely to be far greater in SaaS than it is in insurance. Just take an industry such as car insurance, where any two individuals could very well be paying a different price, despite having the same amount of driving experience, the same postcode, years of no claims discounts and so on.īut as with insurance, there’s no way of knowing exactly what the other customer is paying. Inconsistencies in pricing isn’t unique to the software industry though. But there are almost always customers with discounted rates. Of course, many companies will pay what the company wants them to, either because they’re unaware that the vendor may offer a discount, they don’t have the time to deal with back and forth negotiations, or they’ve left it too late to negotiate a renewal. But as we’ve already mentioned, there are often huge disparities between the prices that different companies end up paying - something that happens even when a vendor does publish their pricing, but that is even more prevalent when a buyer has absolutely no frame of reference on cost. In fact, as many as 55% of vendors obscure their pricing on their site, requiring you to enter into sales discussions to find out what they want you to pay. When it comes to buying software, perhaps the biggest challenge is the lack of transparency in the market. How lack of transparency is causing huge pricing disparities In other words, the prices that companies of a similar size and profile to your own are actually paying for the same subscription. Which means that when it comes to benchmarking the cost of SaaS, the focus shouldn’t be on what a provider is quoting compared to their competitors, but rather what they are actually charging their customers. ![]() In fact, according to our own data here at Vertice, 90% of buyers are overpaying for their software by as much as 20-30%. There are often always savings to be had. By definition, price benchmarking is the process of comparing the price of something - in this case the cost of software - to that of a competitor.īut while this is a strategy that many buyers adopt when purchasing or renewing their SaaS tools, mainly in the form of obtaining quotes from multiple providers to compare and use as leverage during negotiations, this insight alone is unlikely to secure you the best possible deal on a contract.īecause the prices that SaaS providers quote are rarely set in stone.
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