Enterprise Pricing: How to Move Upmarket
Enterprise customers pay more but expect more. Pricing for enterprise requires different structures, negotiations, and contract terms than SMB sales. Here's how to capture value from large accounts.
Why Enterprise is Different
Enterprise pricing isn't just SMB pricing with more zeros. The buying process, value perception, and success metrics are fundamentally different. For broader context, see our complete pricing strategy guide.
Key Differences
| Aspect | SMB | Enterprise |
|---|---|---|
| Buyer | Individual or small team | Buying committee, procurement |
| Sales cycle | Days to weeks | Months to quarters |
| Price sensitivity | High (budget constrained) | Lower (value matters more) |
| Requirements | Features and price | Security, compliance, support, SLAs |
| Pricing | Published, take it or leave it | Negotiated, customized |
Enterprise Value Drivers
Security & Compliance
SOC 2, SSO, audit logs, data residency, encryption at rest. Table stakes for enterprise, often not valued by SMB.
Support & SLAs
24/7 support, dedicated CSM, guaranteed uptime, response time commitments. Enterprises pay premium for reliability.
Administration
Advanced user management, custom roles, API access, integrations, provisioning (SCIM). Operational efficiency at scale.
Customization
Custom workflows, branding, reporting, implementation services. One-size-fits-all doesn't work at enterprise.
The Enterprise Premium
Enterprise features often cost more to deliver (support, compliance, infrastructure) but also justify premium pricing. A 3-5x price premium over SMB is common and justified when you're meeting enterprise requirements.
Enterprise Pricing Structure
Enterprise pricing is typically "Contact us" on your website, but you still need internal pricing logic. The key is applying value-based pricing principles at scale.
Pricing Components
Platform/Base Fee
Fixed fee for access to enterprise features, regardless of usage. Covers compliance, security, and base support costs. Often $10K-50K+ annually.
Usage/Seat Component
Per-seat, per-usage, or tiered pricing based on consumption. Scales with deployment size. Can include volume discounts.
Services
Implementation, training, custom development, premium support. Often billed separately or included in larger deal values.
Volume Discounting
| Tier | Users | Per User | Discount |
|---|---|---|---|
| Standard | 1-100 | $50 | - |
| Growth | 101-500 | $40 | 20% |
| Enterprise | 501-2000 | $30 | 40% |
| Strategic | 2000+ | Custom | Negotiated |
Negotiation Strategies
Enterprise deals involve negotiation. Prepare for this by knowing your floor prices, understanding what you can give, and protecting key terms.
Things to Negotiate On
- Volume discounts for larger commitments
- Multi-year discount (10-20% for 2-3 year terms)
- Prepayment discount (pay annual upfront)
- Implementation services included
- Additional users/seats at reduced rate
Things to Protect
- List price (maintain price integrity)
- Renewal terms (avoid one-time deals)
- Unlimited liability clauses
- IP ownership or exclusive arrangements
- Aggressive SLA penalties
Negotiation Tactics
- Trade, don't concede: Give discount for commitment, not for nothing.
- Know your floor: Set minimum acceptable terms before negotiating.
- Maintain list price: Discount, but don't lower the list price itself.
- Time-bound offers: Create urgency with deadline-based incentives.
- Plan for price increases: Build escalators into multi-year contracts.
Procurement vs. Budget Owner
Procurement's job is to negotiate price down. Budget owners' job is to solve business problems. Sell value to budget owners before procurement gets involved. Once it's "in procurement," it becomes a cost negotiation.
Contract Considerations
Enterprise contracts include terms beyond pricing. Understand common requests and which battles to fight.
Common Enterprise Contract Terms
Annual Commitments
1-3 year terms are standard. Longer terms justify deeper discounts. Build in price escalators for multi-year.
SLAs
Uptime guarantees, support response times. Be realistic—aggressive SLAs create operational burden.
Liability Caps
Enterprises want unlimited liability. Push for cap equal to 12-24 months fees. Carve out specific exclusions.
Termination Rights
Enterprise wants out clauses. Consider termination for convenience with notice period and prorated fees.
Renewal Terms
- Auto-renewal: Contract renews unless cancelled 30-90 days before term end.
- Price escalator: Build in 3-5% annual increase on renewals. Customers expect this.
- True-up: Reconcile actual usage vs. committed usage at renewal.
Moving Upmarket?
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