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Is 1 + 1= 1,5 or should it be 3?

 

A thought provoking conversation recently with a SaaS scale-up I'm coaching.

You can see their solution as a AI based workflow solution, which can be used in different departments.

 

The case for 1+ 1 = 1,5

When selling to a single department, some advantages emerge:

  •  the core of the platform is in
  •  it's easy for us (scale-up) to add an extra workflow later
  •  up-sell is easier,
  •  offering a discount for extra similar workflows seems logic

 

The case for 1+ 1 = 3

When they sell to multiple departments:

  •  Serving multiple departments is adding substantial value to the organisation
  •  you are helping different departments, who all should have similar budget for the solution as they extract similar value
  •  you are adding something extra apart from 2 workflows, you deliver a system that is more mature, as it allows for the management and orchestration of multiple use cases compared to a 1 trick pony.

 

So which path to choose?

It depends:

  •  1 + 1 = 3 should be crafted with "land and expand" in mind. The first one is easy candy, easy to start, get them familiar, see the value and want more = if crafted this way - sales will be easier, but your first ticket will be low.
  •  1 + 1 = 1,5 The initial sale will be harder, sales cycle will take a little longer as first budget is higher. You almost need a visionary buyer in this case that is seeing the future and taking the risk for the rest of the organisation.

In the end it is a nuanced decision, blending product, customer, strategy and vision.

What is your pricing puzzle?