SaaStr · 2015-09-17
· 3912d
SaaS Pricing Strategy Across Market Verticals: Using Competitive and Adjacent Comparables
Jason Lemkin outlines a methodology for determining SaaS pricing in enterprise markets by analyzing two types of comparables: direct competitors and adjacent products. Enterprise pricing decisions are primarily driven by historical spending patterns, budget allocation for similar-value applications, and secondarily by competitive pressures, rather than cost-based models.
Metrics in this report
Adjacent Product Price Ratio
50-100%%
range
Workday pricing relative to Salesforce in same organization
Competitive Price Multiplier
1.5-5xmultiple
range
when SaaS product is more valuable than direct competitors