We are launching a new B2B SAAS product. We could either ask the customer to sign the contract or get the payment via credit card. Our thinking is if he did the payment by credit card, the sales cycle will be much shorter. What is the optimal price point so that customers don't have to go to their VP's/Finance for for approval. We would like to maximize the revenue, but also shorten the sales cycle. I realize that larger companies may still have to go to legal department to ensure governance.
This is hard to answer without knowing the size of company you are targeting...
Answered 9 years ago
This is organization dependent, but I've run into multiple orgs that will approve a mid-level manager up to $5K/mo in recurring or a single expensive of $20K.
Exploring the CC path, there are spending limits often imposed that may not even match their spending parameters. For example, the CC may have a daily max of $5K. I've personally encountered scenarios where we have to bill the CC in consecutive days (with their approval) to stay under the spending limit.
Last, many orgs are starting to impose tighter restrictions on recurring expenses - so be aware of that. You can create one time charges around activation / implementation / customization / training / data migration / etc that will help you increase your revenue for that customer without having to bake in so much on the recur fee.
Think of it like Shipping & Handling... its an after thought for a lot of people after they decide the core product is worth the price you outlined.
Answered 9 years ago
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