I make a tool that is widely used to help people with reading issues, including those that are caused by traumatic brain injuries/strokes. We have been contacted by government-run hospitals and other government-run entities that want to avail themselves of our self-serve pricing ($1.99/mo), which we keep very low in order to ensure that most people who can afford a computer can afford our software.
However, these entities wish to have us comb through dozens of pages of legal agreements and review even more laws/regulations that they are subject to. When we tell them that they have to pay institutional pricing if they want require contract review, they balk and say that they cannot pay any more than the price on the website, which is for self-service. I understand that they want to pay the lowest price possible, but they need to respect that different customer types (with different contractual review needs) are fundamentally buying different products/services.
You can fix this with licensing, as many products do inversely: they have a free educational / nonprofit / noncommercial version (e.g. many CAD programs in the past) and if you don't fall in the carveouts, you must pay $$$$$.
Also some forms of libraries and game engines ask that you pay $X per year if you earn more than $Y per year, including the reviled changes to the Unity license, as does Apple given the app store have a lower tier theoretically for smaller businesses.
I've done this in the past for people - same product, but "Certified HIPAA Compliant" or what have you, even when the base level is already HIPAA compliant. But we won't sign a BAA for you unless you cough up or demonstrate need.
You can do this with this kind of tool by offering a tier for private citizens, and a tier for governmental agencies. Or even rebrand with a separate tool: GovCloud, for example.
> they have a free educational / nonprofit / noncommercial version (e.g. many CAD programs in the past) and if you don't fall in the carveouts, you must pay $$$$$.
> Also some forms of libraries and game engines ask that you pay $X per year if you earn more than $Y per year, including the reviled changes to the Unity license, as does Apple given the app store have a lower tier theoretically for smaller businesses
Is it common for companies to try to find workarounds to stay on lower tiers (e.g. signing up on a personal email but using it for company work), especially when you can't verify which tier they should be on? I've rarely seen pricing tiers like this in smaller SaaS products for example and I'm curious how well they'd work.
I've had product ideas where I'd be happy to give it away for free to people that can't afford it but then I can't see a simple way to check this. You see "email us to use for free if you can't afford it" sometimes.
The $1.99/mo is presumably per user; how many users are said hospitals/institutions paying for? I'd have assumed they'd be looking for a _discount_ on the website price tbh.
In the context of assistive technologies used to people recovering from TBIs, our tool is very inexpensive.
They typically are looking to cover dozens, not hundreds/thousands of users. If that were the case we could offer a discount on ongoing usage, as long as they covered the one-time cost of contract review.
Aren't they just lying to you? No law prevents you from setting terms and prices for different sets of features and services nor forbids them from paying market price.
They aren't paying above market they are simply being billed for the actual terms and features they are demanding.
I don't know if they're strictly lying, but they sure aren't recognizing that going through all their legal documents requires thousands of dollars of contract review.
Wellcome to the world of B2B. Or any purchase involving larger ammounts of money. Buying real estate without having a lawyer reading the sales contract is just stupid.
And usually those fees are close to negliable, should be considered in pricing as part of the overhead and are simply cost of doing business.
Good news, if you are already at the point your customer provided paper worl to be reviewed, you are pretty advanced in the sales process with a decent chance of making the sale.
It doesn't have to be about law, the person in charge of purchasing the service may be bound by rules internal to their administration, such as "you have to pick the cheapest option that fills the requirements".
>No law prevents you from setting terms and prices for different sets of features and services nor forbids them from paying market price.
There are laws (in some places) that prevent you from charging the government more for a product than you charge another customer. So you'd really want another SKU for a higher price tier to make it definitively a separate product rather then just telling them they'll need to pay more if they ask for something.
Who'd have thought real-world B2B sales require more than a credit card and a subscription link? Like, contracts, paper work, audits and lawyers? This is outrageous!
I worked in the Danish public sector for a decade and we didn’t really adhere to this. That being said, the more pricing tiers you have and the more complicated it is to buy your product the less likely we will even try it.
Aside from that your biggest competition is always going to be when “included” services does what you do as part of a package deal. Ten-fifteen years ago it wouldn’t have been weird to see an organisation using whatever was the equivalent to Microsoft Teams at the day, we used a couple I think one was called Jabra or something along those lines. Today you just aren’t very likely to see things like Zoom or Slack in the public sector because when you get Microsoft Teams as part of your deal anyway, then it’s really hard to justify paying for something similar.
This is also part of why Microsoft bought so heavily into OpenAI… they know that almost no one in enterprise is going to be buying anything but their AI when it’s part of their “package deal”. Even in the company where I work now, which is transitioning from startup to enterprise you see this. We now only use Enterprise Co-pilot (well in the dev department we still use gpt 3.5) but the company as a whole only uses (and pays for) co-pilot because it’s “free” for everyone on the sort of license we buy through our current third party Microsoft license vendor.
I mostly use it to make AI images of cats or ducks performing various functions for internal presentations.
That's the one point MS figured much better than others: How to bundle software, from Windows to Office, in their liscensing and product bundles. From a certain company size onwards, those bundles simply beat the patch work approach of individual software solutions.
