No way I am calling you for a price

http://labaraka.tumblr.com/post/19249892253/no-way-i-am-calling-you-for-a-price

by labaraka • 14 years ago

514 158 14 years ago

labaraka.tumblr.com

GB_001• 14 years ago

On one hand I definitely agree that transparent pricing gets more customers, if your product isn't made for an enterprise level there is no excuse not to make the prices transparent.

With that being said, many software and web applications that use the "contact us for a price method" that aren't just vultures looking for your info usually need more information in order to price you properly. For example, the size of the company, your budget, your specific needs etc. may be needed to ensure that the company gets a fair specific price that caters to their needs.

Xurinos• 14 years ago

I skip by any site that does not mention a price, but the one thing they could do to get my interest is to at least mention a price range and what goes into the calculation of the lower and upper prices. Ballpark figures are nice, and some small description of the rationale helps me to make a decision, even if it is to make a call to drill down further.

pyrhho• 14 years ago

Better yet, a calculator, like Heroku.

dsr_• 14 years ago

I'd really appreciate that. It informs the customer and doesn't waste the salesperson's time.

Even better, show me some preconfigured packages that you're willing to sell at a public price. If they look reasonable but I need more, I'll happily talk to a salescritter, now that I understand that I actually have a more complicated problem.

ovi256• 14 years ago

The "needed to ensure that the company gets a fair specific price that caters to their needs" is usually code for "please give us enough info so we can estimate how much we can price discriminate against you". It can only work against you (the buyer) versus a transparent pricing strategy. Otherwise, you know, they (the seller) would ask for all this multi-dimensional info on the pricing page, and give you an estimate there. Many service providers do this, even for complicated multi-dimensional problems, see AWS' price estimator for an example of transparent pricing with lots of inputs.

alexchamberlain• 14 years ago

Whilst I acknowledge that prices don't always reflect the cost of production and supply (think oil), budget is rarely needed to provide you with a price. Provide a price first and I'll tell you if I can afford it or whether you'll have to do better to get my business.

michh• 14 years ago

That's no excuse, it just means their pricing model is too complex.

Why not offer default packages with a fixed price for small and medium sized businesses and encourage those that have specific needs/concerns to leave their details to discuss the possibilities and get a quote?

labaraka7• 14 years ago

They could just as easily qualify me by making me select company size, specific features, etc.

ticks• 14 years ago

They may also be charging some clients far too much for certain products, so cannot risk being more transparent. That's why I'm put-off by services that don't quote prices, there's no way of knowing if you are one of the clients that are being ripped-off.

davemel376• 14 years ago

From a Pure Business Perspective: What you pay for a product or service should have nothing to do with their costs, or pricing to others but rather the value the product creates for you.

From an emotional level: Your concerns have to do with defending your purchase to others and your fear of looking like the fool who "overpaid" for the same product someone else got for less...

This fear should be satisfied with other messaging and tools than pricing transparency. Like, service promises, real testimonials, added value bonuses, and other tools to "feel like the cool kid" who go the best of them.

PaulHoule2• 14 years ago

As someone who's sat on both sides of the table in enterprise software sales I understand this sentiment, but there are many kinds of software where you really do need to talk to a salesperson.

I once worked for a company that had an average sale well under than $100,000 but that sale typically included several licenses for at least two different products -- one a desktop app and the other a SaaS offering. There would always be at least a day of training, and possibly some consulting services and the possibility we'd bundle in something from a vendor we work with.

If customers tried to set that up with a web form they'd screw it up and hate our product.

Similarly, something like an ERP or Library Management System is going to take a considerable amount of attention from the vendor to fit it to your needs, so the salesperson isn't just there to harass you, he's there to make sure you get what you need to succeed.

----

I'm working on a product now that I could have sold through an impersonal automated process for $50 a month... If I could get enough subscriptions.

I didn't believe that I could, and decided to price the product much higher and sell it through a "high touch" process so I could make a living selling it to a handful of customers.

One issue is that anyone who sees the price would get sticker shock. However, the price per year will be between 1/3 and 1/4 of what it would cost to develop in house, and it would be charitable to estimate that most organizations would have 50% chance to produce a product that works (almost) correctly... After losing a few months on the schedule! Plus my product is documented, supported and comes with a pretty bow on top.

My guess is that for the value this delivers to customers it's worth my time to explain to them the value they're getting.

labaraka7• 14 years ago

In this specific instance it's $199 setup fee + $40/month + $4/month/user so really nothing too wild. I don't know what the others charge but I am not willing to play the game to save a couple of bucks here or there.

Also, they ask you to qualify the size of your company before giving you pricing (e.g., "Small business 1-50 employees click here"). I would be cool if they had a high-touch process for companies with more complex needs but at this level, it's really a plain-vanilla service.

swalberg3• 14 years ago

That pricing model is about a month old. Before that you'd have to go through the sales process, and it was like everyone else, base fee plus surcharges depending on what services you want.

By sheer coincidence I'm sure, we (wavepayroll.com) launched with a flat rate pricing model ($3/employee/pay period, all in) back in November. I'm curious if you considered us, and if so, what your impressions were.

freejack2• 14 years ago

If your prospects are going to screw that up with a web form then I'd say some or all of these things are true;

a) your licensing model is too complicated. b) your web forms aren't usable c) your website isn't helpful enough

And before I get flamed, I regularly sell services worth north of $2k via a web form that lets the customer purchase solely using a credit card. Instead of making it hard for people to buy and assuming that "high touch" means "call us", we have staff ready at every step of the way to help people with their purchases and the use of their services when they need help. Instead of investing in artificial processes that force a customer to call us, we're investing in real customer service, training and product development. Automated doesn't have to be impersonal, unless that's your frame going in. Also, I have a suspicion that real customer value can't be created in the sales process. No one has ever come out of a negotiation or sale (automated or otherwise) saying "Now that's why I do business with these guys.". Customers derive value from using your product or service, not buying it. I think its misguided to try and create customer value in the sales process (Although you do say that your sales process simply explains the value to come, it doesn't try to create value... I'm just riffing on an idea... :)

marcusf• 14 years ago

I think you're completely missing the point. If you're doing software that needs per-customer customization (typically enterprise), then at some point the vendor and customer will need to talk. A great salesperson will be there to help you through the entire process (though I admit a lot of them suck, mostly due to misaligned incentives). It's not about bad UX in a web form, it's about selling custom software requiring interaction.

nobody_nowhere• 14 years ago

A, b, and c are all consistently true in enterprise software which sells for above $10k/mo.

PaulHoule2• 14 years ago

I'll say that I've met a few sales engineers that really impressed me with their skills at understanding what I need and getting it to me.

I've met a lot of dolts too.

As someone who spent a year programming in job shops (a year too much) I can also say that the quality of the salesperson was a big factor in project success and quality of life.

Some salespeople qualify customers so we get customers that we can really help. Other salespeople "hire" nightmare customers that destroy the profit we made on 5 good customers.

Some salespeople would get contracts with specific requirements and a realistic budget and schedule. A project like this can be a joy to work on and it's equally gratifying to know you make your customer happy too.

Some salespeople write down "2.5 hours" to implement a feature, and it really would be "2.5 hours" if you knew what the feature would do, but it takes 4 hours of talking to the customer to find out what they think they want, then they're wrong and you have to do it again, and you end up spending more like 12.5 hours when it's said and done. That's no fun.

So yes, good salespeople add a lot of value. If the salesperson sells something impossible, the best architects, designers, and programmers can't make the story have a happy ending -- probably the greatest advancement in my programming career was realizing that I can't code myself out of an impossible situation.

bmelton11• 14 years ago

I strongly disagree that any of those things is necessarily the case.

Licensing models tend to be complicated for enterprise software, but it's usually complicated for a fairly decent reason.

I can't possibly expect somebody to understand how Sun Access Manager (now defunct) is going to work when they buy it without talking to us first. Even those people who understand the product well enough are going to need support from the mothership, and the high touch process gives us the ability to plan for that, to your benefit.

Depending on the features you need, it might entail wrapping in five or six different products. Some of those products might be given to you for free (if they're only there to fit a requirement of another product, and aren't going to be used, otherwise) -- some of those products will be discounted based on expected use, or the expected benefit to your organization. Some of those products might have different requirements. In large software companies, it's entirely common for two companion products to support different databases, or different message buses, etc. You need to know that before you buy.

My company currently sells software that costs $3million a year or more, and involves weeks of professional services to get up and running, training on how to use the produt, etc.

You really expect us to let you just buy this on the internet?

Instead, just call us. Pretty please.

TWAndrews4• 14 years ago

"North of $2k" is not a large number. The company that I work for routinely sells services for 10's or 100's of thousands of dollars (and software for 10x of that). No one purchases that via web form.

We also offer a cheap, buy via credit card offering for people who just want to get going without talking to a sales rep.

For our particular software, the high touch model has roughly 100x higher sales figures.

snowwrestler• 14 years ago

I'm on the purchasing side and I can say that I've been turned into a customer during a sales process. I've called just to check things out and ended up a very happy customer.

I think a lot of what people don't like about the "enterprise sales process" is actually just due to shitty salespeople--folks acting pushy, calling all the time, trying gimmicks, being stupid or uninformed, etc. In contrast, interacting with a good enterprise salesperson feels exactly like getting great customer service, only it begins before you've plunked down any money.

The key to managing the sales cycle is to learn how to figure out early that you've got a shitty salesperson and either get a new one (if you really want the product) or get rid of them and find another option. You have to be willing to be firm, and maybe even a bit of a jerk sometimes.

jakejake2• 14 years ago

Definitely true for most mass market software. But there are definitely products where a web form would have to be extremely long and/or complicated to be helpful at all.

nknight4• 14 years ago

> If customers tried to set that up with a web form they'd screw it up and hate our product.

Then your product, its documentation, or both is crap.

There are two kinds of "enterprise" solutions. The practically turn-key, and the kind that have ridiculous licensing models and "at least a day of training" attached. The latter are inevitably a gigantic waste of resources. The former are invaluable.

Your job is to solve problems, not give your customers more problems.

ig12• 14 years ago

Some systems are inherently complex, it's stupid to pretend otherwise.

It's like someone saying "Why do I have to learn to program, all I want to do is make an app for my phone".

ropman76• 14 years ago

I disagree. With software that works on top of client data the more hands on you are the better. Each client had "irregularities" in their data that have to be ironed out. With good access (and good communication) you can hopefully take care of "irregularities" before the client even knows they are there.

ehutch792• 14 years ago

OR, documentation is a 'feature' you need to pay (double) for (true story)

bmelton11• 14 years ago

General customer requirements for enterprise software: - Must integrate with their existing authentication. Their authentication may be LDAP, Active Directory, or any number of other things you may or may not have heard of.

- Must store to their existing storage hardware. Hardware may be SANs from EMC, 3Par, HP, etc. Storage arrays may or may not be writable over the network. Storage arrays may require fiber channel. Storage arrays (I'm looking at you EMC Celera) may require interaction against custom APIs.

- Must work against their existing load balancers -- load balancers may be hardware or software, may or may not utilize sticky sessions, and may or may not preserve the integrity of data packets passed along.

- Must allow for SSL encrypted traffic to be intercepted by their proxies, decrypted and logged, then forwarded along and still run as quickly as you would expect any application to run.

- Must support Microsoft SQL Server and Oracle Database.

Take the '10/30 minute blog' programming videos you see for all the common frameworks, make them work with the above feature set, and tell me how long it takes. Then sell that to a company with more than $10,000 users, and then do so without requiring any support from you or your company.

After that, if you still think it's as easy as you do, I will more than happily issue a public apology for having disagreed with you. Until then, honestly, I think you're looking at the problem space a little naively.

wpietri3• 14 years ago

> If customers tried to set that up with a web form they'd screw it up and hate our product.

I'm sure it's true for quite a number of products. But what I wonder: how many products are that way because of the sales channel?

Even in the best case, a product built for self-service and user-driven adoption is going to be designed very differently than something sold through a high-touch sales channel with an expectation of expensive training before use. And that's before you account for all the product distortion that many enterprise salespeople introduce. "Why of course we'll have feature X in the next release!"

I expect there are a lot of companies that started out with an enterprise approach that are now ripe for disruption with a user-friendly, self-service model. A classic Innovator's Dilemma situation: the competition would seem laughably weak until it's too late. E.g., Linux vs proprietary Unix solutions.

bmelton11• 14 years ago

I think the decisions are driven by the market, honestly, not the sales channel.

The products targeted at enterprise simply have to be vastly different than products targeted at small to medium sized businesses. The 37Signals business model of "Minimal features, give the customer what we give them, and nothing more" just doesn't work for companies with over xx,000 people.

How many large enterprises are using Basecamp? Highrise?

It isn't because they aren't good products, and it certainly isn't because they don't sell well... It also has nothing to do with the sales channel and process. But, simply put, the bigger the customer, the higher-touch the integration process must be, which by nature, drives up the touch-requirements of the sales cycle.

The long-drawn out sales cycle is a feature, really. It helps the customer get a really good understand of product capabilities before a lot of money is spent, as well as a realistic timetable of how long it will take to be integrated with their existing services, tied in to their existing data, authenticating against their native ADs or LDAPs, and provisioned within their existing storage arrays.

It isn't for everybody, and it certainly isn't the silicon valley way, generally speaking, but it works when done well, despite how much people might hate it.

MehdiEG• 14 years ago

This is what was discussed a few days ago here: http://news.ycombinator.com/item?id=3649828

Joel Spolsky's blog post, mentioned in the discussion, is worth a read too: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...

And so is this post: http://blog.boundary.com/2012/03/02/selling-in-2012-its-comp...

As the later says, it's complicated. Personally, as most of HN readers I guess, I also can't stand this sales model. But some buyers demand it. And they happen to be the ones with the most cash to spare.

labaraka7• 14 years ago

Thanks for these links. I hadn't seen the Alex' post. Exact same feeling except that he is clearly a much better writer than me :)

rdl3• 14 years ago

I wish there were a price estimator for arbitrary things and services site.

Knowing, for instance, that the unpublished standard Salesforce price is $50/seat/mo would be really useful when preparing budgets, without wasting time engaging salespeople.

Knowing the general price of various things makes it obvious if something is even an option (i.e. you do not have someone TIG weld your $3 item back together; you buy a new one).

Sort of like "jigsaw, for prices". eBay, Amazon, and Google work pretty well for cheap items with deep markets, but not for relatively obscure things. I'm sure Purchasing people have rules of thumb for various types of products, but I don't have access to this.

The prices don't need to be great, just within 20-30%. You could probably pay for this in leadgen alone, easily.

prawn• 14 years ago

I have thought about doing this for home renovation because general pricing takes at least a phone call or two and involves people whose time you may not be keen to waste at that point. e.g., Have estimates for home demolition, flooring, rendered walls, brick work, fences, landscaping, pools and spas, etc.

Gyms in Australia are often pretty cagey with the pricing structure and many have not historically advertised their prices openly. Because of that, I created gymprices.com.au - it does suffer from the problem that the traffic is people looking for prices rather than to share their membership prices, but maintenance is pretty minimal and it makes enough to pay various bills.

re_todd• 14 years ago

Gyms in the USA can be pretty cagey with pricing as well. I looked at a few different gyms briefly and could not get even a ballpark figure what the price would be. They all wanted to set up a meeting with their sales guy. One guy said it depends on my job, where I live, etc ... I was pissed and left. Luckily, I knew a guy at one of the gyms who got me signed up for $29/month. When one of the employees saw that, he said the owner must really like me to approve that, so I guess it was a good deal. However, I know a sales guy that makes $100k/year, who got a gym membership located in a wealthy community for only $25/month.

rdl3• 14 years ago

At the very least, if you don't offer pricing transparently on the site (and signup), you should offer a free demo. Get the user hooked before talking about price is a viable enterprise sales technique (mainly to price differentiate and extract maximum revenue), but you need to accomplish the "get him hooked" part. Requiring payment at all adds friction, as does requiring human contact.

jasonkolb2• 14 years ago

I think this is related to what I commented about, which is that you get this mostly from old-school enterprise companies. Many of their setup and configuration systems are much too complex to do it on the fly. It would be a huge internal project to even think about it.

patio11• 14 years ago

I sympathize, partially because I get filled with existential dread every time I get a voicemail message to my business number. ("Who in their right mind calls to ask for information when it is all right there on the website?! GRUMBLE GRUMBLE." + )

That said: ballpark how many people work in this industry with decisionmaking authority on this. Ten thousand? A thousand? Let's call it one thousand. It is entirely possible that you are smarter than all one thousand of those people. They've devoted their careers to selling payroll services and success at selling payroll services determines whether their children eat tomorrow. You're unwilling to make a phone call because you find payroll services pretty boring. But nonetheless it is entirely possible you've found the thing the whole industry is missing.

I just would not bet that way.

+ n.b. I get phone calls from people whose budget is $9 a month (me: "Oh cripes, not again.") and people whose budget is $200 a month (me: "Now here is a call which I'd gladly take.") and people whose budget requires an NDA to hear ("Schedule a call for 3 AM in the morning? It can be arranged, sir!")

P.S. There exist interesting hybrid models where you have the self-service option and published pricing and then there exists the Call Me plan, explicitly or by implication. Find someone in one of those businesses, get them drunk, and then ask whether the published plans or Call Me makes more money.

labaraka7• 14 years ago

As you imply, there are segments in every market. Of course there is a segment of companies with hundreds or even thousands of employees with gigantic budgets. These guys are going to do RFP's and spend months evaluating the different payroll providers.

Then there is the segment of small guys lik me who have under 10 employees who frankly don't need anything too complicated. You can say "I am only going to serve large enterprise customers through a complex sales process" and that's completely fine with me. But don't pretend to cater to my segment if you are not to adapt your model.

nhebb• 14 years ago

The counterargument is that the sales process may not be optimized for total revenue. It may be optimized for commissions. And, the people controlling the entire sales process, including online marketing, are the sales department. I only have anecdotal experience with this, but enough so that I think it's a contributing factor.

dctoedt• 14 years ago

> The counterargument is that the sales process may not be optimized for total revenue. It may be optimized for commissions.

In theory, companies' commission plans are supposed to be optimized for total profit (vice revenue). That's really hard to do.

Not the least of the reasons for this is that the people who work on commission can be quite creative in maximizing their personal goals, such as commissions, 100-percent-club junkets, etc.

orangecat• 14 years ago

You're unwilling to make a phone call because you find payroll services pretty boring. But nonetheless it is entirely possible you've found the thing the whole industry is missing.

On the contraty, I assume they're good at their jobs, and therefore way better at negotiation than me, and therefore whatever price they come up with will extract nearly all the consumer surplus.

davidw• 14 years ago

> They've devoted their careers

Since payroll is not some hip, new, web 2.0 kind of thing, it's always possible that they do it way "'cause that's the way we've always done it", too.

equalarrow• 14 years ago

Sounds like a perfect opportunity for someone to come along and 'fix' this. :)

gvb• 14 years ago

+ n.b. I get phone calls from people whose budget is $9 a month (me: "Oh cripes, not again.")

When I have a $9/month budget, I would rather know up front (from the web page) that the reaction on the other end will be "Oh cripes, not again." The "call me for a quote" is a very strong signal that I need not bother to call, and I generally don't. It's the old adage "if you have to ask, you cannot afford it."

On the other hand, the OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.

TWAndrews4• 14 years ago

<i>OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.</i>

There might be, but I wouldn't bet that way. There's a relatively small window of company size between the point when someone needs a payroll service (10+ employees?) and the point where it makes sense to speak with a person about what bits and bobs a payroll provider should include and negotiate a price for those services (maybe 200+ employees).

I'd guess that's the size of a significant fraction of Y Combinator companies, but I'm not sure how well that would hold up across all industries.

seanp2k2• 14 years ago

>"OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service."

mmmhmm.

See also: Dwolla, PayPal Here, Square POS.

POS software sucks.

vacri• 14 years ago

If you have a $9/mo budget, you should already know that the reaction on the other end will be "Oh cripes, not again". $9/mo is $108/year, which really isn't much considering dev, support, infrastructure, non-tech staff, and overheads.

If you want interested, keen support, then do what is necessary: pull out your wallet and stop going for the cheapest thing possible.

One honest reason why some companies do 'please call' is that pricing structures can get complicated quickly, the intracacies of which may be necessary but may confuse the purchaser. I've just come out of a meeting where it's clear we're going to have to take a financial hit simply to allow our reselling agents an easier price structure to quote from (these agents aren't primarily technical staff).

On the other hand, the OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.

Friendly, keen support is a frill.

jakejake2• 14 years ago

I wouldn't consider the payroll software business ripe for disruption. A few major vendors have been doing it with transparent pricing and no sales-rep interaction for years. The other thing is that payroll is not exactly an easy system with all of the complicated tax laws, forms, communicating with banks for direct deposit, etc.

huhtenberg• 14 years ago

My bet is that self-server option has a higher per-transation yield, but the over-the-phone option has a higher closing rate.

In fact, I worked with a company that had both options implemented, and pretty much all inbound sales calls resulted in sales. If people are calling, then they are usually ready to buy - from you or from someone else. A good sales person will make sure it's you.

Angostura• 14 years ago

Yes, well I'm sure if you only provided sales through a specialised fax number, virtually every fax would be solid sales enquiry.

You might only get one fax a month, of course.

charlieok2• 14 years ago

Signing up online is more efficient than picking up the phone. This alone seems like enough to guarantee that it is only a matter of time before everybody in the industry offers online self-service, excepting those who do not need or want new customers.

angelbob• 14 years ago

You'd think. But you can get much greater differences in pricing if you find out who you're talking to before you give them a price. That's really hard to do with online self-signup.

JS_startup3• 14 years ago

Not really. Pricing gets complicated for enterprise sales so it can't be as simple as just signing up online. Furthermore, if it's a trial they are signing up for then they have to be put into the sales funnel (meaning they have to sift through a bunch of tirekickers to find the real buyers). Finally you'd have to worry about fraud, trial abuse and all of the other related pains of free and open signups.

There's a reason that basically every business in the industry does it this way.

swalberg3• 14 years ago

I'm in this space - wavepayroll.com - and I worked at Ceridian for 3 years, so I might have some insight here.

Most payroll companies don't just do "payroll", e.g. a gross to net calculation. They offer different modules, like time and attendance, some HR functionality, direct deposit, employee self service. For the most part, every feature is an additional charge. Add on top extras like having your cheques and reports couriered to you.

So from their perspective it's difficult to provide a price because they don't know what kind of business you are and what features you want. The charges are highly variable and can differ from run to run.

pnathan• 14 years ago

I was looking at one of the professional math toolbenches the other day, and pricing ran like this:

   Base Product, $X.
   Addon A, $a
   Addon B, $b
   etc.

I have a hard time believing that these solutions can't be architected in such a way that each plugin is a discrete charge that can be listed.

wheels• 14 years ago

It's only been two weeks since we had exactly this discussion:

http://news.ycombinator.com/item?id=3649828

Ryan_Shmotkin2• 14 years ago

Something most 'non - enterprise' people don't understand:

The price is not set by some magic formula. It is set directly by how much the customer is willing to spend.

And you can't get that from a Webform. (Its worth loosing some 100$/mo clients to wheel in a $50K one)

eitally• 14 years ago

Yep! And as a couple of other folks have noted, a lot of that is because you're often not just buying COTS software. You're purchasing/licensing an entire solution to one or multiple business problems that involves software but probably also interfaces & integrations and possibly also custom development of new features. If you consider payroll systems and you're a large enterprise, the odds are high that you have multiple payroll systems globally (by country, usually), and they all need to talk to your HR systems, and they probably also need to talk to your ERP (or whatever your employee data system of record is). This is not trivial.

The same is true of many other enterprisey systems: CRM, ERP, MRP, factory operations, industrial controls, ....

The complexity of an enterprise business systems + IT environment makes most startups look like a piece of cake. The lifestyle and type of challenges aren't for everyone, especially most entrepreneurial types, but don't just poo poo big business.

p.s. I have grown accustomed to having to speak to a sales person to get quotes, but what bugs me more than anything is the cold calls I get from IT outsourcing companies, especially the ones that have a token sales office in the US but are 100% located offshore and try to hide that fact.

jpdoctor• 14 years ago

> The price is not set by some magic formula. It is set directly by how much the customer is willing to spend.

You missed half of the formula: It is set directly by how much the customer is willing to spend among the options available.

As soon as transparent pricing exists (Ceridian in OP), it will garner market share. Presumably the overhead is lower (because sales people cost money), so they are probably at an advantage.

Ryan_Shmotkin2• 14 years ago

Sadly this is untrue.

Two enterpise buyers (yep, its a profession) can buy the same number of licenses and additions ending up paying significantly different (10x) price.

[And many of those won't ever even use the product]

frobozz• 14 years ago

I disagree. I think they understand it perfectly well. They just don't like it.

areed• 14 years ago

I've had the same problem the last few weeks looking for a colocation provider in my city for half a cabinet. Ever time I ask for information through a web form, they ask for a conference call. I reply back with my power and bandwidth requirements and ask them to email me a quote. At that point I'm usually ignored. I finally selected a provider two hours away who publishes their pricing online.

nmcfarl• 14 years ago

This is what gets me - the time. In things like Payroll, or Merchant Accounts, where I have a ton of options, I could spend all week on hour long con calls, just to get pricing ball parks from all of the viable vendors. I don’t even need hard prices on a website - but I could really use 1) people that are willing to talk to me for 5 minutes, not an hour. 2) some reason on the web site to choose your company to devote my time to.

Interestingly what this lack of info usually leads to is us going with services our friends and acquaintances suggests - we just don’t have the time to listen to all the salesmen.

vaksel2• 14 years ago

what I don't understand is why email isn't enough. Why in this day and age do you need the phone # and address? That just tells me that you'll use my information to do high pressure sales calls, and not just to "inform" or "customize" my quote

ig12• 14 years ago

Because email has completely different dynamics from real-time conversations. If you need to ask lots of short questions (varying based upon previous answers) than email is a terrible way to do it.

It's also much easier to figure out misunderstanding on the phone due to the more informal nature of phone calls rather than emails.

vaksel2• 14 years ago

fine...why not chat? Not as much pressure on the customer to just have a quick chat online...phone calls are much more pressure intensive

jchung• 14 years ago

Where is this alleged clear and well-designed Ceridian website with the transparent pricing? I clicked through and all I got for it was a whole bunch of "call me back" forms. Exactly what OP derides about all of the "other" services.

labaraka7• 14 years ago

Screenshot: http://d.pr/XXCj

NameNickHN• 14 years ago

How do you get there?

dholowiski• 14 years ago

I used to feel the same way, until I got a job as an IT manager at a company, and a big budget. I still like prices posted on web sites, but I won't buy something without talking to a sales-person.

My job depends on making the right technology decisions. I'm not just going to buy based on the price list, I'm going to buy a custom tailored product with the right price for me. And I need to talk to a sales person, and I want them to be good at selling and I want them to convince me. If a company can't be bothered to hire good sales people then they probably can't be bothered to hire good support people, or programmers either.

Enterprise is different.

bencpeters• 14 years ago

This kind of thing happens all the time in the scientific instrument market as well. In some cases it's justified - many instruments/sensors have near endless customization options. But much of the time I've been asked to call for a quote even for simple things like industrial sensors. I can understand not having an exact price, but it seems like in this day and age it's shooting yourself in the foot not to have some kind of ball park price listed online. I know I personally just go to another supplier's website if at all possible rather than filling out a quote request form or calling...

tylerrooney• 14 years ago

I went through the exact same process 2 months ago trying to set up payroll. In general, Canadians get some pretty horrible value out of any small/medium business service.

I was going to go with Ceridian but their web app doesn't support Mac. Because we're still small enough, I actually just rigged it up myself in Xero and then just have to use the nastiest 90s era website from my bank. That at least saved me the step of massaging exported data into Xero.

If you want some real price transparency on payroll apps, this is pretty hard to beat : http://wavepayroll.com/pricing

Zak2• 14 years ago

their web app doesn't support Mac

What millennium is this? There's no excuse for a web app needing a specific OS these days, and hasn't been for quite some time.

jasonkolb2• 14 years ago

This is a good way to tell old companies from startups.

IMHO startups are much more sophisticated in marketing. It's pretty common marketing knowledge that you want to reduce friction as much as possible. A phone call is a lot of friction for most technical people who want to be as efficient as possible.

No pricing model should be this complicated. If you have to make a form for the customer to fill out to calculate their cost, fine. To be honest even a live chat wouldn't be terrible.

I understand the people here who defend the enterprise sales cycle. I get it, I participated in that world as a startup for years. But you have to admit there's something fundamentally broken about the whole idea.

I think it comes down to this: if your product is good enough that people can use it and want it, you shouldn't have to hide your pricing or require time to use sales tactics to justify the price to customers.

ktsmith• 14 years ago

> I think it comes down to this: if your product is good enough that people can use it and want it, you shouldn't have to hide your pricing or require time to use sales tactics to justify the price to customers.

I think this is naive. I've found that at the enterprise level those involved with purchasing often aren't those using the services being purchased. I spent a signifiant portion of the day yesterday on the phone with an extremely large company (~140k employees) explaining why the process they wanted to implement with our software couldn't happen as it would not be compliant with federal law and they could risk losing their billions of dollars in federal contracts. There was only one person on the phone actually involved in daily management of their process and everyone else was part of purchasing.

JS_startup3• 14 years ago

I used to be of the same mindset until I got into enterprise sales.

Face it, some products and sales processes are going to be complex and can't be boiled down into a simple pricing scheme like a startup would use. It doesn't mean the company is old or dishonest or that you should take offense, just that it isn't practical to list prices on the site.

Examples would be:

Per user pricing (what constitutes a user? Any discounts for users past a certain number? What about simultaneous access? Can we share accounts?)

Revenue scaled pricing (what if we're pre-revenue? Any discounts for newer companies?)

Contracts (can we work off of a contract for an increased price? Do we get a discount for longer term contracts? Who owns the data? Do we get onsite support? How much does support cost, if anything?)

Basically, stop looking at large enterprise sales through a startup lens.

OriginalSyn2• 14 years ago

If that is a case ballpark it for some of common use cases. When I was a systems admin there was nothing I hated more when doing initial discovery of options was high pressure sales harassing me before I was ready to even short list products. Having to call for a quote was usually an immediate disqualification.

TWAndrews4• 14 years ago

As a system admin, what do you do when someone comes to you and says "how much hardware do I need to support my application?" Imagine trying to give them the correct answer without being able to talk to them.

andrewem• 14 years ago

I used Ceridian for COBRA services after I left a previous employer. (For non-Americans, COBRA is where you get to keep your employer-provided health insurance for a limited time if you pay the full cost of it, and yes it's a hassle.) I noticed in January that I hadn't gotten a bill from them in a while, and thus began months of agony where they told me they hadn't gotten updated rates for the new year from the insurance company but were sure it would come any day now. After a while they sent a notice saying that the insurance had been cancelled. Many long phone calls to them over three or four months got me nowhere, until finally frantic calling to the HR department of my ex-employer got it sorted out in a mere two weeks or so. And yes, I should've involved my ex-employer sooner.

The upshot is that I will never willingly do business with Ceridian again.

davemel376• 14 years ago

Putting yourself in their shoes for a second.. they were just trying to pre-qualify prospects who really are in pain, enough pain to really try to solve their problem by talking to a salesman who can properly communicate the value and figure out if you are a good fit.

You are right that this pisses some people off, people who are prepared to spend money on their product, but many marketers don't try to get ALL the business out there, they try to get the RIGHT CUSTOMERS FOR THEM... Customers who will appreciate their value. Afterall, if you can't differentiate them from others without tools like price points, you probably wouldn't be happy to be their customer either..It is a Win For You.

Odds are, if you are making this decision based on price, and not being able to compare price is enough to scare you off, you consider their product somewhat of a commodity, which exposes the company to price resistance, which is bad for business.

So, while you hate these companies, and their process pissed you off, I would argue that you probably don't fit into the profile on "their perfect customer"

Perhaps they are guilty of not qualifying you in a better way, like with content so compelling it convinces you to call them to discuss your needs...

pbackx• 14 years ago

Exactly, as a single consultant, I don't have the time to sell to every one, so I use this tactic to pre-qualify potential clients. It's also a great way to learn more about the customer and try to judge your potential value to them, thus giving you both a better insight in whether or not it is actually worth going into the details of price.

Zak2• 14 years ago

Shopping primarily based on price isn't the only reason I want to see prices very early in the process; I also want to eliminate things I obviously can't afford.

If I wanted a car and had no pricing information, I'd start with the cars that appealed to me most - likely Ferrari, Koenigsegg and Hennessey. I'd have to waste hours or days setting up calls or meetings with salesmen and doing the "who mentions a number first" dance to figure out that I can't afford these cars and should be looking at a Mazda Miata instead.

If I wasn't sure I really needed a car yet and had some idea what the process would be like, there's a good chance I'd put it off. Cars don't work this way though. I might not know exactly what options I'll get or how much I'll pay down to the dollar, but I know a Miata is about $25k. There's room for a little more transparency in enterprise software pricing without going to a fully self-service model. I should be able to find out in a few seconds whether your product is something I can even consider.

davemel376• 14 years ago

What you can afford is relative to the value you perceive you will get.

If you want to see price early on, the value is already fixed in your head, which means that you believe that you can satisfy your need with any such product, without regard for really differentiating them. This would mean you view their product as a commodity. As a commodity shopper, you are not the ideal customer for me. Because you can't appreciate the true and unique value I offer. (or worse, you are too lazy to try and appreciate all the value you can get out of each option but would rather use price as your shortcut to differentiate, which again makes you a less than ideal prospect.)

Like the saying goes, "If you Have to Ask, You Can't afford it!"

I am guilty of this as well, and as a consumer I completely agree with your desire to shop around and get the best deal... but, as a business owner, I would be hurting myself by publishing prices.

jrs235• 14 years ago

So, if not showing a price stops you from calling/inquiring about their product then, assuming the market they are attempting to pursue are companies with a very high need and lots of money, not showing a price appears to have worked.

If they showed a price that seemed astronomical they would probably get hagglers and feedback of "I'd go with you if you drop your price" and they don't want to deal with those customers/inquiries and noise...

Edit: I didn't see the comment you replied to prior to responding with the above.

To add, if the company's sales people got lots of and lots of these potential customers calling/emailing/etc saying "you're overpriced" the sales team could begin to believe it and being probably commission based push internally to lower the price to increase their sales which, in the long wrong, hurts their company's goals, strategy, and long term objectives.

loner4555• 14 years ago

how this story got 199 points so far remains to be understood.

krmmalik• 14 years ago

I've been noticing the same thing about so many sites in the UK lately. And it's the IT related industries that seem to be the very worst it. I was gathering some competitor intelligence for most of this week and noticed that there were very very few sites that were transparent with their pricing. Its wrong on a few levels, but when everyone else around you is doing the same thing sometimes its not so obvious how bad for business it really is.

we're setting all our sites up with transparent pricing now.

Tashtego• 14 years ago

I recently had to deal with this when shopping for a shipping system to replace our ugly old Filemaker plugin. "Call us for a quote", having to wait through two weeks of sales cycle to get an API doc that should've just been on the web site (the worse was the company that had a full wiki for their API, but only available to customers), features written in marketing-speak instead of displaying the real capability of the product, etc. These were good products being horribly sold.

ValG• 14 years ago

Having been in sales for most of my career (well entrepreneurship is sales so all of my career), I can tell you the premium for a "customer database" within a sales organization. Any good sales organization will do every and anything they can to get your info so that they can do exactly what everyone hates, put you in their CRM cycle... you'll get emails, pamphlets, calls, everything until you die (hence the credo "Die or Buy"). I would venture to guess that as these companies were designing their sites, they looked at their competitors and figured out "wow, everyone else is requiring all of the info before we give them a quote, what a great way to build a 'database'". Clearly not the case, but I'm also guessing Ceridian was the only one to really think about how a customer views the quote getting process. As such, they come out ahead...

GigabyteCoin4• 14 years ago

I thought this mentality would be a given on HN but thanks for writing about it.

I would go even further to state that "no way am I going to meet you for a price".

I just recently had the task of finding the cheapest storage lockers for myself.

I called 5 companies. 4 of which gave me their pricing immediately. The 5th company had the most ridiculously gung-ho storage locker saleswoman I almost laughed... she refused to give me a firm price, and suggested that I drive in to meet her (~45 minutes) before she will even hint and what I might be paying..?

I told her I was an experienced (and cranky) entrepreneur at heart and that I didn't feel like playing this game right now. She persisted and I hung up.

Maybe they make more money that way, but it sure is a bad business model.

Car salesmen work the same way I have noticed... I visited a large block of car salesmen recently... Time is money so I simply walked into each dealership and asked them for a price list of a few cars I was interested in.

Nobody would give me one. Not without sitting down for some kind of appointment with a scummy salesman (when they were all just standing around drinking coffee anyways, we're at the height of their demise here).

How is this business tactic still in practice?

I would think consumer protection laws would target it at some point? If you sat my brother down with any salesman, he would walk away much poorer.

He wasted $200 on a "gold HDMI cable" and would probably waste an extra $10,000 on a car if given the opportunity with a salesman, not that he has the money.

TWAndrews4• 14 years ago

It's still in practice because it's effective. People who frequent HN are not a representative sample of buyers of any product.

GigabyteCoin4• 14 years ago

Right, and I was asking basically how our consumer protection laws would allow for such tactics?

If a customer asks for a retailer's lowest price on something, they should be forced to answer, not tip-toe around the question asking if they want the best or the worst this-or-that...

Duff2• 14 years ago

At the grocery store, a banana is a banana -- it costs $0.89/lb, and the store's CoGS is $0.69/lb. Car dealers are different -- they don't make money on the car, they make it on the other stuff that the salesman peddles. Thus, no price list.

Software is the same way. Salesmen are there to spot opportunities and get a solution out to the customer. You may sign up for payroll services online, and not realize that for an additional $X/mo, you can get some sort of expensive regulatory requirement handled as well.

If you're dumb, and buy a $200 HDMI cable, how is a web form going to stop you from making poor decisions. A typical startup pricing page has 3-5 plan options.

GigabyteCoin4• 14 years ago

My brother is not dumb, he simply doesn't know about cabling and electronics. I would venture to bet that you would look pretty dumb trying to perform his job as a carpenter.

All he wanted to do was have the best picture for his brand new PS3, and the salesmen in Futureshop were eager to sell that to him.

jff2• 14 years ago

Where do you live that car prices are not clearly displayed on the windows? You just walk through the lot, brushing off the salesmen, and note down the prices listed in the window. That's what they want you to pay, and if you're a fool that's what you'll pay. If you're smart, you'll go through a little of the song-and-dance that knocks a significant amount of that price off. Unfortunately for spergy Internet people, that's how buying cars works; I don't much like it either, but if car dealers worked like Amazon, you'd see a Honda listed at $20,000 and that's what you'll pay, like it or not. This way you do get the option to bring it lower, sometimes all the way down to invoice price, because as another poster points out, car dealers don't necessarily make their money that way.

GigabyteCoin4• 14 years ago

I should have mentioned... I was shopping for used cars. They tend not to place them on the windshields of used cars in actual dealerships in the GTA. Some "show models" perhaps of used cars, but not all.

aidenn0• 14 years ago

There are large classes of companies for whom sales of less than say $50k or $100k just aren't worth their time. All customers will have the same sorts of problems, so the smaller customer are less profitable.

The smart companies that want you to call them for a quote do it to make it harder for less profitable customers to come to them, without being at all an impediment for larger customers (who would want to negotiate anyway).

The dumb companies that want you to call them for a quote say "Oh look, ADP does it, we should copy it!"

MikeMacMan• 14 years ago

I think you're being a little unfair here.

You need to talk to a salesperson because payroll is complicated, every business's needs are different, and most small businesses want some kind of personal touch. If they let you just sign up for what you think is the best solution for you, chances are you'll get it wrong and you won't be satisfied.

I'll give you an example: I manage a retail business that is composed of 5 different LLCs, each with their own payroll. When I went to ADP, I needed a salesperson to help me migrate all my payroll data, choose a suitable cutover date, talk through what kinds of special services I might need (direct deposit, checks drawn against ADP's accounts vs. our own checking accounts, etc).

Lastly, customer service is very important when it comes to payroll, and I see the sales process as a demo of their customer service.

Could somebody like ADP offer a self-service solution for somebody like you, who knows what they're doing and doesn't require much? Of course they could. But then the burden of getting the setup exactly right is now placed on you. And if you screw it up, then you'll be calling them for help. That's not an experience they'd prefer the customer to have.

acak• 14 years ago

To the author: Is this the Ceridian you're referring to?

http://www.ceridian.com/

There is no pricing information I can find on their website and they're very clearly saying for their products (in this case, on the payroll page):

Contact a Ceridian expert today for a free payroll software analysis, and you'll find a payroll processing solution that's exactly what you need, exactly the way you need it.

sdfjkl• 14 years ago

There's pricing for some of their products. For "small business" it makes perfect sense. For "Enterprise" the "contact us so our salesperson can make false claims[1] about what our software does and gauge how much money he can screw you over for" method is sadly still prevalent.

http://www.ceridiansmallbusiness.ca/Products/Payroll-Bundles...

[1] Not all salespeople are evil, greedy bastards. Only the majority I've met.

thekevan• 14 years ago

It all depends on what is being sold. I worked for a company where the options were almost infinite. Price depended on which options they wanted and how many subscriptions. (Which could literally be from 1 - 10,000) When asked how much, I would reply with, "How much for a house? Hard to answer because we don't know if "house" means an outhouse of the White House."

joshaidan• 14 years ago

This reminds me of the robocall political scandal in Canada which was fuelled by CRM data. It's just as frustrating when political parties do it, especially in the robocall case which was an absolute abuse of the system.

I worry sometimes about the implications this has on democracy, where power might be defined as how strong and agile your CRM system is, rather than your actual ideas and character.

brudgers• 14 years ago

I understand how the author feels. I prefer to bank using an ATM. I prefer the self scanning checkout at the grocery store.

Call for price isn't aimed at the author (or me). It's aimed at people who have a certain set of expectations about B2B relationships. It's aimed at people who see receptionists as a necessary business expense in all circumstances. It's aimed at people who don't trust the internet when it comes to transactions.

It's a bigger market segment than people like myself or the author.

SoftwareMaven• 14 years ago

Something early-stage companies don't get is that enterprises are complex. Adding a service provider requires hooking up to a dozen systems that manage everything from time tracking to shipping logistics. For many, many problems in this space, there is no ideal, perfect solution. Instead, you make a series of weighted choices to come up with the least-worst solution. And that information, for a broad swath of software, can't be effectively communicated on a web site.

Given those types of sales are the ones that bring in six or seven figures of revenue, it is not surprising companies optimize for that. But that is just one of the places startups, solving focused problems, can find some blue ocean.

(But, yes, when you are in the small company, buying almost anything just sucks. You aren't big enough to even get attention, often times.)

johngalt• 14 years ago

<translation>Code me an app. What do you mean I have to call you and discuss design? No way I'm calling a developer and dealing with all the geeky stuff. Just list me a flat price and timeline per app. </translation>

Even if you feel that payroll is a solved problem, you still need to deal with people. Anytime something is important you want a specific person in charge of it's execution. Imagine that you have a business of 50 employees and one day the payroll doesn't get processed correctly. You now have 50 angry employees on your doorstep. How much do you think they will care that you've filled out a form on a website asking for resolution? Or that you're on continuous hold with some call center op that is paid $2 a day regardless of if he solves your problem.

You pay an account rep commission so you have an individual person who's direct personal livelihood depends on a well executed service.

webjprgm• 14 years ago

+1000. I've run into this phone call game for other kinds of services as well, and I hate it. Just tell me what the price is.

bitwize• 14 years ago

The last time I saw a Ceridian payroll system it was fucking broken. Their web interface was written in ASP VBScript and looked it. It was so stunningly well-coded that if you closed the browser window without explicitly clicking the "Log off" button, it will count you as still logged in but lose critical state, meaning you couldn't get back onto your timesheet without calling someone down from HR who knew the voodoo chicken dance it took to get Ceridian unwedged.

I hope they've improved since then. Otherwise this person is in for a bit of a hassle.

lnanek• 14 years ago

Isn't call for a price a good deal for little guys? If IBM calls for a price, they are going to get charged a huge number like 100k. If a Mom and Pop shop calls they are either going to get told to take a hike, or given a much better deal. Seems like the companies that can afford to pay more will be footing the bill.

Shenglong• 14 years ago

I've worked with Ceridian before, and their people are pretty good as well. And hey, if you ever need a workforce performance system, InView/Dayforce is right there too :)

usaar333• 14 years ago

On OP's particular issue: I'm surprised he didn't mention paycycle (now part of intuit). I went with it due to similar concerns (as well as it clearly being the cheapest).

debacle• 14 years ago

Along the same line, I've stopped applying for jobs that don't list some sort of salary. That shows me that either you're ashamed of the salary you're offering or you want to exploit candidate ignorance in order to get them to work for a salary that isn't competitive.

It's deceptive, and it's not fair.

larrys2• 14 years ago

"but I will never get sucked into some big company’s CRM and get hounded by commission-seeking salespeople/vultures."

Exactly what is the OP problem?

All salespeople are "vultures"???

And anybody on commission "hounds" you?

That's right only YOU have a right as an entitled person to earn a living. Everyone else is superfluous and there to serve you efficiently and at the lowest possible cost.

I have news for you. There is nothing that I like better than a salesperson that hounds me and is on commission. That's the way you sometimes get your best deal. Based on my many years of experience buying things. They are hungry to make quota and if you play it right you save money.

Go deal with clerks and order takers if you want. I'd rather deal with people hungry for my business.

onethumb• 14 years ago

Wonder when companies will start to figure this out already?

easymovet• 14 years ago

SpaceX got it right by skipping the enterprise sale cycle when they sell their rockets. Falcon Rocket: $10Million sales@spacex.com

chazandchaz• 14 years ago

Appassure does this. It is annoying. Their pricing isn't bad, comparatively. I didn't call them for two years. I knew there product was tits, but thought they would through me into a boiler room sales pitch. Dell bought them, decided to call. Turns out the price isnt negotiable and hasn't changed in 18 months. Big loss on their end.

markm248• 14 years ago

With all due respect, that is a terrible way to determine the payroll tool that will impact every current and future employee. I, like most of the commenters, agree the last thing anyone needs is another call from some underpaid, under-polished inside sales rep who has attended to one too many Zig Ziglar seminars, but benefit to your employees will outweigh the inconvenience.

ctdonath• 14 years ago

I once responded to a SolidWorks ad offering a trial copy. For years they mailed & emailed & phoned sales pitches, but not once - even when I pointed this out to multiple persistent reps - did they send the promised trial copy.

Funny, I never bought a copy.

daemon13• 14 years ago

Having read all the 140+ comments, this reminds me of the hooker/girlfriend dilemma.

In the first case you know how much you ought to pay upfront and you [mostly] know what you will get. No need for call backs, conf calls or multiple meeting...

In the second case, the price to pay and the promise is unknown. But! things can go both ways - (1) good or (2) bad. And yes, you will know the outcome only after many call backs, conf calls, meeting and flirting period...

Looks like the everyone's conclusion is that those are different use cases [or market segments], so it's better for your own sake not to mix them! :-)

rundmc• 14 years ago

Just had this exact experience with a company called Vindicia. No matter how many times I asked for pricing, just getting the usual guff. Already found other vendors of the same solution where I immediately understood their pricing & therefore felt better about investing my time getting to know them and their products better.

No way I am calling you for a price

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