Enterprise Software Pricing Does Not Work for Social Platforms/Tools

Some social tool startups still try to sell these huge, enterprse software-like prices with big, upfront committments and large ongoing maintenance fees. Or, they will try to setup variable pricing that (often based on pricing levels) is essentially the same thing.

Seriously? In the social space, so many of these tools are new and unproven. The first goal should not be big, software fees but collaborating with a big brand and proving that your tool works. Then, big brands can help you improve your product and create credible case studies and references to scale.

The smarter providers are getting in the door by figuring out how to monetize their products in extremely tiny, variable chunks. It’s clever because they know that big brands will participate if the costs are low and will stay and grow if the tool is strong.

This becomes especially important for Silicon Valley startups who often spend too much time “networking” with each other and VCs, but not enough with the brands who will actually use their stuff. 

 

Rishi Dave

Rishi Dave

Executive Director at Dell
I am the Executive Director of Digital Marketing at Dell. In this role, I have global responsibility for implementing marketing, lead generation, and content strategies for Dell.com, social media, communities, and mobile, and I manage the digital support of Dell events for Dell’s B2B segments. I was named one of the 2012 & 2013 Top Digital Marketers by B2B Magazine.
Rishi Dave

@RishiPDave

Chief Marketing Officer at Dun & Bradstreet; http://t.co/auHGIr24l1; 2012 & 2013 Top Digital Marketer (B2B Magazine)
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3 Comments on "Enterprise Software Pricing Does Not Work for Social Platforms/Tools"

  1. jlarrison says:

    Amen Brother! Great post! Too many times the SV folks are hung up on hanging with their network and not spending quality time where the customers are. Spend time in Ohio or Illinois or Kansas. The value a customer brings a new company in the social space is worth 1000x that of the price they could ever charge.

  2. Rishi Dave says:

    Good to hear you agree!. It seems to be getting worse and worse in the Valley in this area!

  3. James Gross says:

    To speak to the silicon valley world. Most social services don’t charge money because they have VC backing and are going to worry about monetization "later" in the spirit of signing up brands as loss leaders. This story doesn’t end well for most. I do agree with you that not enough people spend time with their customers and that can be a detriment to really understanding and developing to solve their problems. I’m a big fan of in-person meetings.

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