That said: ballpark how many people work in this industry with decisionmaking authority on this. Ten thousand? A thousand? Let's call it one thousand. It is entirely possible that you are smarter than all one thousand of those people. They've devoted their careers to selling payroll services and success at selling payroll services determines whether their children eat tomorrow. You're unwilling to make a phone call because you find payroll services pretty boring. But nonetheless it is entirely possible you've found the thing the whole industry is missing.
I just would not bet that way.
+ n.b. I get phone calls from people whose budget is $9 a month (me: "Oh cripes, not again.") and people whose budget is $200 a month (me: "Now here is a call which I'd gladly take.") and people whose budget requires an NDA to hear ("Schedule a call for 3 AM in the morning? It can be arranged, sir!")
P.S. There exist interesting hybrid models where you have the self-service option and published pricing and then there exists the Call Me plan, explicitly or by implication. Find someone in one of those businesses, get them drunk, and then ask whether the published plans or Call Me makes more money.
When I have a $9/month budget, I would rather know up front (from the web page) that the reaction on the other end will be "Oh cripes, not again." The "call me for a quote" is a very strong signal that I need not bother to call, and I generally don't. It's the old adage "if you have to ask, you cannot afford it."
On the other hand, the OP is indicating there is an underserved marketplace that may be ready for disruption by a low cost no frills service.
There might be, but I wouldn't bet that way. There's a relatively small window of company size between the point when someone needs a payroll service (10+ employees?) and the point where it makes sense to speak with a person about what bits and bobs a payroll provider should include and negotiate a price for those services (maybe 200+ employees).
I'd guess that's the size of a significant fraction of Y Combinator companies, but I'm not sure how well that would hold up across all industries.
To approximate the range you gave, 20.6% of all US firms fall between 10 and 500 employees (The bins in the data don't match your range perfectly) – so it'd be reasonable to guess that ~14% of all US firms are between 10 and 200 people.
That's a fairly attractive market – especially considering that if you made it easy enough, you'd draw in more of the smaller companies (say 5-20 employees) and they represent an even bigger slice (~74.5% of all US firms).
So yeah, I think it's significant as a target market.
That's crazy. There's not near enough granularity to infer anything about the attractiveness of the market. A firm with 10 people is probably not paying a payroll company; a firm with 200 people almost certainly is.
Also, given the number of companies that have 10 employees vs. 200 employees, if you could figure out how to make those 10 employee companies outsource their payroll, you'd have a decided opportunity (and that was also my point and it's exactly the point that philwelch makes here).
The fact that you and everyone else assumes that a firm with 10 people makes it to small to sell to makes it an opportunity for innovation. A well-done web-based setup rather than the higher cost, high-priced sales person/pitch could easily bring down the costs to make it a more economical proposition to serve the (presumably) lower-margin but higher aggregate volume small business segment.
Sounds like an opportunity. If you have 10 people, at least one of them is probably spending their valuable time on payroll; if you had an affordable self-service option that undercut the existing providers, maybe they would pay a payroll company. And the firm with 200 people, maybe you could undercut their payroll company as well.
If you want interested, keen support, then do what is necessary: pull out your wallet and stop going for the cheapest thing possible.
One honest reason why some companies do 'please call' is that pricing structures can get complicated quickly, the intracacies of which may be necessary but may confuse the purchaser. I've just come out of a meeting where it's clear we're going to have to take a financial hit simply to allow our reselling agents an easier price structure to quote from (these agents aren't primarily technical staff).
Friendly, keen support is a frill.
See also: Dwolla, PayPal Here, Square POS.
POS software sucks.
On the contraty, I assume they're good at their jobs, and therefore way better at negotiation than me, and therefore whatever price they come up with will extract nearly all the consumer surplus.
In theory, companies' commission plans are supposed to be optimized for total profit (vice revenue). That's really hard to do.
Not the least of the reasons for this is that the people who work on commission can be quite creative in maximizing their personal goals, such as commissions, 100-percent-club junkets, etc.
Then there is the segment of small guys lik me who have under 10 employees who frankly don't need anything too complicated. You can say "I am only going to serve large enterprise customers through a complex sales process" and that's completely fine with me. But don't pretend to cater to my segment if you are not to adapt your model.
Since payroll is not some hip, new, web 2.0 kind of thing, it's always possible that they do it way "'cause that's the way we've always done it", too.
In fact, I worked with a company that had both options implemented, and pretty much all inbound sales calls resulted in sales. If people are calling, then they are usually ready to buy - from you or from someone else. A good sales person will make sure it's you.
You might only get one fax a month, of course.
What the hell difference does it make who they're talking to? What matters is what they can provide and under what terms.
There's a reason that basically every business in the industry does it this way.
I once worked for a company that had an average sale well under than $100,000 but that sale typically included several licenses for at least two different products -- one a desktop app and the other a SaaS offering. There would always be at least a day of training, and possibly some consulting services and the possibility we'd bundle in something from a vendor we work with.
If customers tried to set that up with a web form they'd screw it up and hate our product.
Similarly, something like an ERP or Library Management System is going to take a considerable amount of attention from the vendor to fit it to your needs, so the salesperson isn't just there to harass you, he's there to make sure you get what you need to succeed.
I'm working on a product now that I could have sold through an impersonal automated process for $50 a month... If I could get enough subscriptions.
I didn't believe that I could, and decided to price the product much higher and sell it through a "high touch" process so I could make a living selling it to a handful of customers.
One issue is that anyone who sees the price would get sticker shock. However, the price per year will be between 1/3 and 1/4 of what it would cost to develop in house, and it would be charitable to estimate that most organizations would have 50% chance to produce a product that works (almost) correctly... After losing a few months on the schedule! Plus my product is documented, supported and comes with a pretty bow on top.
My guess is that for the value this delivers to customers it's worth my time to explain to them the value they're getting.
a) your licensing model is too complicated.
b) your web forms aren't usable
c) your website isn't helpful enough
And before I get flamed, I regularly sell services worth north of $2k via a web form that lets the customer purchase solely using a credit card. Instead of making it hard for people to buy and assuming that "high touch" means "call us", we have staff ready at every step of the way to help people with their purchases and the use of their services when they need help. Instead of investing in artificial processes that force a customer to call us, we're investing in real customer service, training and product development. Automated doesn't have to be impersonal, unless that's your frame going in. Also, I have a suspicion that real customer value can't be created in the sales process. No one has ever come out of a negotiation or sale (automated or otherwise) saying "Now that's why I do business with these guys.". Customers derive value from using your product or service, not buying it. I think its misguided to try and create customer value in the sales process (Although you do say that your sales process simply explains the value to come, it doesn't try to create value... I'm just riffing on an idea... :)
Licensing models tend to be complicated for enterprise software, but it's usually complicated for a fairly decent reason.
I can't possibly expect somebody to understand how Sun Access Manager (now defunct) is going to work when they buy it without talking to us first. Even those people who understand the product well enough are going to need support from the mothership, and the high touch process gives us the ability to plan for that, to your benefit.
Depending on the features you need, it might entail wrapping in five or six different products. Some of those products might be given to you for free (if they're only there to fit a requirement of another product, and aren't going to be used, otherwise) -- some of those products will be discounted based on expected use, or the expected benefit to your organization. Some of those products might have different requirements. In large software companies, it's entirely common for two companion products to support different databases, or different message buses, etc. You need to know that before you buy.
My company currently sells software that costs $3million a year or more, and involves weeks of professional services to get up and running, training on how to use the produt, etc.
You really expect us to let you just buy this on the internet?
Instead, just call us. Pretty please.
The better at enterprise sales you get, the more quickly you can determine who is going to drag their feet, who's going to give you a bunch of money and then be a pain in the ass, and who's just going to draw out the sales process to infinity while making sure to call you every day so that they can get their money's worth.
Any takers? ;-)
That said, there's only so much you can disrupt enterprise sales. There's an art to it that, while I hate to stereotype, isn't commonly known to most of the valley types I've met.
It's arcane, it's awkward, and it takes lots and lots of practice and failure. In short, selling multi-million dollar software simply isn't something you can accomplish with a Paypal button and a download link. The average sales cycle is measured in months, and a sub-30-day sale is considered monumental.
I'm confused. You seem to be making conflicting suggestions. Is this "arcane" and "awkward" sales process truly a sine qua non for your industry? Or is it the product of social inefficiencies that just can't be corrected by technical measures?
So they surround themselves with advisors (consultants, project managers, architects, etc), some of them good, some of them bad, and between the 3 groups (the buyers, vendors, and advisors), they try to come to an agreement where all 3 are happy.
The sales process is basically nudging all 3 groups into positions where everyone is happy, and can be a long and painful process.
I don't think you're a moron. But the developers generally aren't the same people that pay for the software, especially not in the size of the organizations we're selling to. If you're a 10, 20, 250 person company, you're probably not buying our product. If you're a 30,000 person company, you're in our market.
If you're in a 30,000 person company, I almost guarantee that the 'developer' implementing the product isn't the same person as the guy writing us our check. I'm willing to bet there are at least two layers in the org chart between those people, if not more.
In the size of these organizations, there are enterprise architecture counsels, change control boards, executive steering committees. We need to document to those individuals how we're going to help them further their missions and operating objectives for the years to come. We're going to show how our products can be leveraged to maximize the efforts they're already undertaking.
The change control boards are going to want to see white papers that document what effect our application is going to have on the existing environment. They're going to want to know exactly what ports and protocols need to be exposed for things to work. They're going to need to know what kind of load balancing techniques will work best for our product. They're going to need to know how much storage allocation to expect at years 1, 2 and 5.
These aren't things we expect anyone to know, and they change from version to version. These are the things that we know, and not even necessarily one guy in our group knows them, we need a few people in our team to explain these questions and more.
I've met a lot of dolts too.
As someone who spent a year programming in job shops (a year too much) I can also say that the quality of the salesperson was a big factor in project success and quality of life.
Some salespeople qualify customers so we get customers that we can really help. Other salespeople "hire" nightmare customers that destroy the profit we made on 5 good customers.
Some salespeople would get contracts with specific requirements and a realistic budget and schedule. A project like this can be a joy to work on and it's equally gratifying to know you make your customer happy too.
Some salespeople write down "2.5 hours" to implement a feature, and it really would be "2.5 hours" if you knew what the feature would do, but it takes 4 hours of talking to the customer to find out what they think they want, then they're wrong and you have to do it again, and you end up spending more like 12.5 hours when it's said and done. That's no fun.
So yes, good salespeople add a lot of value. If the salesperson sells something impossible, the best architects, designers, and programmers can't make the story have a happy ending -- probably the greatest advancement in my programming career was realizing that I can't code myself out of an impossible situation.
We also offer a cheap, buy via credit card offering for people who just want to get going without talking to a sales rep.
For our particular software, the high touch model has roughly 100x higher sales figures.
I think a lot of what people don't like about the "enterprise sales process" is actually just due to shitty salespeople--folks acting pushy, calling all the time, trying gimmicks, being stupid or uninformed, etc. In contrast, interacting with a good enterprise salesperson feels exactly like getting great customer service, only it begins before you've plunked down any money.
The key to managing the sales cycle is to learn how to figure out early that you've got a shitty salesperson and either get a new one (if you really want the product) or get rid of them and find another option. You have to be willing to be firm, and maybe even a bit of a jerk sometimes.
Also, they ask you to qualify the size of your company before giving you pricing (e.g., "Small business 1-50 employees click here"). I would be cool if they had a high-touch process for companies with more complex needs but at this level, it's really a plain-vanilla service.
By sheer coincidence I'm sure, we (wavepayroll.com) launched with a flat rate pricing model ($3/employee/pay period, all in) back in November. I'm curious if you considered us, and if so, what your impressions were.
No, I had not considered you because you did not come up in my search (Google + asking founder friends). I am signing up right now. Thanks.
I'm sure it's true for quite a number of products. But what I wonder: how many products are that way because of the sales channel?
Even in the best case, a product built for self-service and user-driven adoption is going to be designed very differently than something sold through a high-touch sales channel with an expectation of expensive training before use. And that's before you account for all the product distortion that many enterprise salespeople introduce. "Why of course we'll have feature X in the next release!"
I expect there are a lot of companies that started out with an enterprise approach that are now ripe for disruption with a user-friendly, self-service model. A classic Innovator's Dilemma situation: the competition would seem laughably weak until it's too late. E.g., Linux vs proprietary Unix solutions.
The products targeted at enterprise simply have to be vastly different than products targeted at small to medium sized businesses. The 37Signals business model of "Minimal features, give the customer what we give them, and nothing more" just doesn't work for companies with over xx,000 people.
How many large enterprises are using Basecamp? Highrise?
It isn't because they aren't good products, and it certainly isn't because they don't sell well... It also has nothing to do with the sales channel and process. But, simply put, the bigger the customer, the higher-touch the integration process must be, which by nature, drives up the touch-requirements of the sales cycle.
The long-drawn out sales cycle is a feature, really. It helps the customer get a really good understand of product capabilities before a lot of money is spent, as well as a realistic timetable of how long it will take to be integrated with their existing services, tied in to their existing data, authenticating against their native ADs or LDAPs, and provisioned within their existing storage arrays.
It isn't for everybody, and it certainly isn't the silicon valley way, generally speaking, but it works when done well, despite how much people might hate it.
Sometimes. Sometimes not, though.
A while back I heard a story about SurveyMonkey, a classic self-service tool. At the time, they are going along like gangbusters: shipping new features, gaining new customers, making users happy. Eventually, some finance person at a major enterprise notices all the corporate credit card charges to SurveyMonkey and contacts them wanting an enterprise deal. Consolidated billing, special discount, special features.
The SurveyMonkey people, I am told, consider it carefully and then tell them "no". They figure they're doing just fine as they are, and have actual user needs for their coders to work on. In a huff, the large-company CFO cuts a deal with some more enterprise-friendly search company and sends out a memo: no more SurveyMonkey.
The memo is widely ignored. The other product isn't as good, and people have actual work to do, so they just keep charging SurveyMonkey to their credit cards like they always have.
My conclusion: with self-service products, the user is the customer. With enterprise products, the customer is often somebody totally different. So I think the sales channel shapes the market, which in turn shapes the product.
There are utility applications that work for enterprise, though I think we could both agree that SurveyMonkey wasn't specifically written at that audience. In fact, it seems that they turned their nose up at it, which is and isn't shocking. Like you said, sometimes the sales funnel does shape the product, and it takes a certain kind of person to go after enterprise sales, as it certainly isn't for everyone.
Winzip is another one. It's certainly valuable in the enterprise, and perhaps even necessary but, to my knowledge, the last time I saw it licensed (many moons ago) they didn't have any sort of enterprise agreement. You just paid for the number of seats.
Need a blog? You could use Wordpress, for free, or you could pay Jive a large bundle of money, have them come in and install it, have active directory and oracle support, and somebody to blame when it doesn't work.
I know for a fact that if somebody would clone Evernote and allow it to operate within the Enterprise (instead of storing data in public cloud), there are at least three government agencies that would buy it for $10,000 or more.
Your point is definitely solid though, but the process that the enterprises are used to following are the ones that will win. If you hired a seasoned enterprise sales team, you could probably make a killing selling Wordpress, or something similar, to prevent people from overpaying for the existing enterprise solutions. You'd just have to know how to get in, and how to follow the sale.
The product itself has nothing to do with that.
Then your product, its documentation, or both is crap.
There are two kinds of "enterprise" solutions. The practically turn-key, and the kind that have ridiculous licensing models and "at least a day of training" attached. The latter are inevitably a gigantic waste of resources. The former are invaluable.
Your job is to solve problems, not give your customers more problems.
It's like someone saying "Why do I have to learn to program, all I want to do is make an app for my phone".
This means they are more likely to keep buying your product (they know you and like you).
They are more likely to come to you when they have an awesome idea for a feature that they want that would make their lives easier. (And you never say no to an ambitious request, you either explain that you lack the budget, or you try to redirect it into something that would fulfill the same need, but is easier for you to do, or you can explain how to do it with the currently offered software).
This is not just enterprise stuff either. Having a bunch of enthusiastic and engaged customers pointing out the holes in your software is extremely useful.
This all assumes that you have technical people who 'get it' and are looking to help satisfy the customer. I would never let an aggressive sales staff near them, however. It would be awesome to have something like 'contact a technical person to discuss solutions.'
- Must store to their existing storage hardware. Hardware may be SANs from EMC, 3Par, HP, etc. Storage arrays may or may not be writable over the network. Storage arrays may require fiber channel. Storage arrays (I'm looking at you EMC Celera) may require interaction against custom APIs.
- Must work against their existing load balancers -- load balancers may be hardware or software, may or may not utilize sticky sessions, and may or may not preserve the integrity of data packets passed along.
- Must allow for SSL encrypted traffic to be intercepted by their proxies, decrypted and logged, then forwarded along and still run as quickly as you would expect any application to run.
- Must support Microsoft SQL Server and Oracle Database.
Take the '10/30 minute blog' programming videos you see for all the common frameworks, make them work with the above feature set, and tell me how long it takes. Then sell that to a company with more than $10,000 users, and then do so without requiring any support from you or your company.
After that, if you still think it's as easy as you do, I will more than happily issue a public apology for having disagreed with you. Until then, honestly, I think you're looking at the problem space a little naively.
If your product doesn't already meet the needs of a particular customer, it's not a product suitable for that customer. If the customer wants you to make it suitable, talk about the cost of that. Otherwise, stop annoying me with sales drones and let me give you money for the software I already know I need.
Somewhere along the way it looks like you and a few other people have confused "products" and "consulting". They're not the same things. Either you have a product ready to go, or you don't. If you don't, you're not a software company, you're a consulting company, and should act like one -- don't pretend to have a packaged solution ready to go.
We do in fact have a product that's ready to go. We have all of the features I listed, plus a hundred others. However, once you get to having all those features, the product is no longer something that you can expect people to download and just install. Sure, there are people that can do it, but it isn't the majority, and it isn't the sort of pain we want our customers to have to experience.
In short, our product requires both the software and the consulting. Not for lack of features, or lack of documentation, but for ease of integration. If the software already costs millions, then the user shouldn't be objectionable to another couple hundred thousand for a team of integration consultants to make their experience a smooth one.
All that said, it honestly sounds like you don't have a lot of experience in this arena, so I'd really appreciate it if you'd stop looking down your nose at me for meeting the needs of our customers in exactly the way they expect them to be met. We're doing a fantastic job, and have stellar relationships with all of our customers, partners and vendors. Just because it isn't the way you'd prefer it isn't reason to be snide, especially as it doesn't sound like you're anywhere close to the size of our target customer.
And yet, we're so far off topic it's not funny. Millions of dollars? This started with a small business owner trying to find pricing for a payroll system. Maybe you'd like to back up and tell me why your ego got hurt when apparently you're such a big man in what you apparently consider a completely separate universe?
The point is that neither has to be the case to require a phone call. The point is that our target audience doesn't have people with both the technical skills to install our product and the authority to make the purchase.
There is absolutely no point in a 'download now' option for this type of software. There is no point in making it easy for the medium-sized customer because they will almost never buy our product. They'll buy something with half the features and much less than half the cost. They'll end up with a vendor who will charge them for every modification they require and they'll end up with a product that does most of what they want, and solves 80 or more percent of their pain. That's what things like Basecamp and Highrise do. They aren't made to fit anyone's needs 100%, except maybe 37Signals.
Our software is expensive because, while it isn't perfect, it does solve 100% of the need for more than one customer. It's a complete, entire package.
And for the record, my ego isn't even remotely hurt, nor did I mean to imply in any way that I'm some sort of big shot; I'm not. I just think that you're wrong, or more specifically, I think that you're painting us with the same brush that you'd paint EMC or Cisco, based solely on the evidence that we're selling expensive software to customers and we don't let people download it. Our competitive advantage is that we aren't them, and that we aren't approaching enterprise sales in the same traditional way that everybody else does.
But that doesn't change the fact that giving our customers access to a download link doesn't help them. Giving them access to our pricing tables doesn't either.
How would you sell enterprise software differently?
Knowing, for instance, that the unpublished standard Salesforce price is $50/seat/mo would be really useful when preparing budgets, without wasting time engaging salespeople.
Knowing the general price of various things makes it obvious if something is even an option (i.e. you do not have someone TIG weld your $3 item back together; you buy a new one).
Sort of like "jigsaw, for prices". eBay, Amazon, and Google work pretty well for cheap items with deep markets, but not for relatively obscure things. I'm sure Purchasing people have rules of thumb for various types of products, but I don't have access to this.
The prices don't need to be great, just within 20-30%. You could probably pay for this in leadgen alone, easily.
Gyms in Australia are often pretty cagey with the pricing structure and many have not historically advertised their prices openly. Because of that, I created gymprices.com.au - it does suffer from the problem that the traffic is people looking for prices rather than to share their membership prices, but maintenance is pretty minimal and it makes enough to pay various bills.
I would go even further to state that "no way am I going to meet you for a price".
I just recently had the task of finding the cheapest storage lockers for myself.
I called 5 companies. 4 of which gave me their pricing immediately. The 5th company had the most ridiculously gung-ho storage locker saleswoman I almost laughed... she refused to give me a firm price, and suggested that I drive in to meet her (~45 minutes) before she will even hint and what I might be paying..?
I told her I was an experienced (and cranky) entrepreneur at heart and that I didn't feel like playing this game right now. She persisted and I hung up.
Maybe they make more money that way, but it sure is a bad business model.
Car salesmen work the same way I have noticed... I visited a large block of car salesmen recently... Time is money so I simply walked into each dealership and asked them for a price list of a few cars I was interested in.
Nobody would give me one. Not without sitting down for some kind of appointment with a scummy salesman (when they were all just standing around drinking coffee anyways, we're at the height of their demise here).
How is this business tactic still in practice?
I would think consumer protection laws would target it at some point? If you sat my brother down with any salesman, he would walk away much poorer.
He wasted $200 on a "gold HDMI cable" and would probably waste an extra $10,000 on a car if given the opportunity with a salesman, not that he has the money.
Software is the same way. Salesmen are there to spot opportunities and get a solution out to the customer. You may sign up for payroll services online, and not realize that for an additional $X/mo, you can get some sort of expensive regulatory requirement handled as well.
If you're dumb, and buy a $200 HDMI cable, how is a web form going to stop you from making poor decisions. A typical startup pricing page has 3-5 plan options.
All he wanted to do was have the best picture for his brand new PS3, and the salesmen in Futureshop were eager to sell that to him.
A smart customer isn't an expert in cabling -- you just need to know enough to question the person you are dealing with. Or ask more than one person. Or ask google. The whole business model of Futureshop is to be a convenient, one stop shop. Their vision of a satisfied customer is someone who walks out the door with anything that the store thinks they need.
I can do rudimentary carpentry, but I know what I can't do. So when I needed to have a new front door hung, I got a couple of quotes. The prices ranged from $250-$1,500. I think I paid around $600 to an old school carpenter who did an awesome job.
If a customer asks for a retailer's lowest price on something, they should be forced to answer, not tip-toe around the question asking if they want the best or the worst this-or-that...
The upshot is that I will never willingly do business with Ceridian again.
Joel Spolsky's blog post, mentioned in the discussion, is worth a read too: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...
And so is this post: http://blog.boundary.com/2012/03/02/selling-in-2012-its-comp...
As the later says, it's complicated. Personally, as most of HN readers I guess, I also can't stand this sales model. But some buyers demand it. And they happen to be the ones with the most cash to spare.
Most payroll companies don't just do "payroll", e.g. a gross to net calculation. They offer different modules, like time and attendance, some HR functionality, direct deposit, employee self service. For the most part, every feature is an additional charge. Add on top extras like having your cheques and reports couriered to you.
So from their perspective it's difficult to provide a price because they don't know what kind of business you are and what features you want. The charges are highly variable and can differ from run to run.
Base Product, $X.
Addon A, $a
Addon B, $b
You are right that this pisses some people off, people who are prepared to spend money on their product, but many marketers don't try to get ALL the business out there, they try to get the RIGHT CUSTOMERS FOR THEM... Customers who will appreciate their value. Afterall, if you can't differentiate them from others without tools like price points, you probably wouldn't be happy to be their customer either..It is a Win For You.
Odds are, if you are making this decision based on price, and not being able to compare price is enough to scare you off, you consider their product somewhat of a commodity, which exposes the company to price resistance, which is bad for business.
So, while you hate these companies, and their process pissed you off, I would argue that you probably don't fit into the profile on "their perfect customer"
Perhaps they are guilty of not qualifying you in a better way, like with content so compelling it convinces you to call them to discuss your needs...
If I wanted a car and had no pricing information, I'd start with the cars that appealed to me most - likely Ferrari, Koenigsegg and Hennessey. I'd have to waste hours or days setting up calls or meetings with salesmen and doing the "who mentions a number first" dance to figure out that I can't afford these cars and should be looking at a Mazda Miata instead.
If I wasn't sure I really needed a car yet and had some idea what the process would be like, there's a good chance I'd put it off. Cars don't work this way though. I might not know exactly what options I'll get or how much I'll pay down to the dollar, but I know a Miata is about $25k. There's room for a little more transparency in enterprise software pricing without going to a fully self-service model. I should be able to find out in a few seconds whether your product is something I can even consider.
If you want to see price early on, the value is already fixed in your head, which means that you believe that you can satisfy your need with any such product, without regard for really differentiating them. This would mean you view their product as a commodity. As a commodity shopper, you are not the ideal customer for me. Because you can't appreciate the true and unique value I offer. (or worse, you are too lazy to try and appreciate all the value you can get out of each option but would rather use price as your shortcut to differentiate, which again makes you a less than ideal prospect.)
Like the saying goes, "If you Have to Ask, You Can't afford it!"
I am guilty of this as well, and as a consumer I completely agree with your desire to shop around and get the best deal... but, as a business owner, I would be hurting myself by publishing prices.
If they showed a price that seemed astronomical they would probably get hagglers and feedback of "I'd go with you if you drop your price" and they don't want to deal with those customers/inquiries and noise...
Edit: I didn't see the comment you replied to prior to responding with the above.
To add, if the company's sales people got lots of and lots of these potential customers calling/emailing/etc saying "you're overpriced" the sales team could begin to believe it and being probably commission based push internally to lower the price to increase their sales which, in the long wrong, hurts their company's goals, strategy, and long term objectives.
Or Worse, undermine their own sales attempts because they don't believe the value offered is worth the price.
Face it, some products and sales processes are going to be complex and can't be boiled down into a simple pricing scheme like a startup would use. It doesn't mean the company is old or dishonest or that you should take offense, just that it isn't practical to list prices on the site.
Examples would be:
Per user pricing (what constitutes a user? Any discounts for users past a certain number? What about simultaneous access? Can we share accounts?)
Revenue scaled pricing (what if we're pre-revenue? Any discounts for newer companies?)
Contracts (can we work off of a contract for an increased price? Do we get a discount for longer term contracts? Who owns the data? Do we get onsite support? How much does support cost, if anything?)
Basically, stop looking at large enterprise sales through a startup lens.
as another poster said, when you're just starting to compile a list of options, high pressure sales pitches are a turn off.
In my experience, the fastest way to lose a prospect is by being ambiguous or flighty about the price which is exactly what you'd be doing if you posted ballpark figures on your site (as well as inviting lots of questions and raised eyebrows since our installations literally range from $1000-$25000)
You need to talk to a salesperson because payroll is complicated, every business's needs are different, and most small businesses want some kind of personal touch. If they let you just sign up for what you think is the best solution for you, chances are you'll get it wrong and you won't be satisfied.
I'll give you an example: I manage a retail business that is composed of 5 different LLCs, each with their own payroll. When I went to ADP, I needed a salesperson to help me migrate all my payroll data, choose a suitable cutover date, talk through what kinds of special services I might need (direct deposit, checks drawn against ADP's accounts vs. our own checking accounts, etc).
Lastly, customer service is very important when it comes to payroll, and I see the sales process as a demo of their customer service.
Could somebody like ADP offer a self-service solution for somebody like you, who knows what they're doing and doesn't require much? Of course they could. But then the burden of getting the setup exactly right is now placed on you. And if you screw it up, then you'll be calling them for help. That's not an experience they'd prefer the customer to have.
With that being said, many software and web applications that use the "contact us for a price method" that aren't just vultures looking for your info usually need more information in order to price you properly. For example, the size of the company, your budget, your specific needs etc. may be needed to ensure that the company gets a fair specific price that caters to their needs.
Even better, show me some preconfigured packages that you're willing to sell at a public price. If they look reasonable but I need more, I'll happily talk to a salescritter, now that I understand that I actually have a more complicated problem.
From an emotional level: Your concerns have to do with defending your purchase to others and your fear of looking like the fool who "overpaid" for the same product someone else got for less...
This fear should be satisfied with other messaging and tools than pricing transparency. Like, service promises, real testimonials, added value bonuses, and other tools to "feel like the cool kid" who go the best of them.
I have no idea what that means.
Assuming it is true, would you agree that your "perceived responsibility" in this case has more to do with your emotional needs than it does to your business needs.
your belief is that there are finite resources within the context of wealth, and the transfer of money is a zero sum game, where someone wins and someones else loses.
Your responsibility is to get the most value out of your resources, but you agree that your responsibility is to spend that money, and that money's function is to move around and create wealth.
Your "responsibility" to route "society's" resources to efficient producers, has nothing to do with actually accomplishing that, but rather how you value things and how you feel.
Besides, my point is... you are not getting "ripped off" if you perceive the value to be greater than what you pay. That money will move around, creating wealth along the way, and withholding that money for what you consider a more efficient usage of it is certainly your right, but far from making any difference in how efficiently society produces...
I do agree that you have a responsibility to yourself to utilize your resources as efficiently as possible, but I hardly think that responsibility extends to everyone participating in the market.
The simple reality is that people make purchase decisions based on emotions and justify their purchase after the decision is made with logic and reasoning.
Whatever logic helps you sleep at night is fine with me, but the reality is we are beasts of emotion and make our decisions based on those emotions.
Why not offer default packages with a fixed price for small and medium sized businesses and encourage those that have specific needs/concerns to leave their details to discuss the possibilities and get a quote?
The price is not set by some magic formula. It is set directly by how much the customer is willing to spend.
And you can't get that from a Webform.
(Its worth loosing some 100$/mo clients to wheel in a $50K one)
The same is true of many other enterprisey systems: CRM, ERP, MRP, factory operations, industrial controls, ....
The complexity of an enterprise business systems + IT environment makes most startups look like a piece of cake. The lifestyle and type of challenges aren't for everyone, especially most entrepreneurial types, but don't just poo poo big business.
p.s. I have grown accustomed to having to speak to a sales person to get quotes, but what bugs me more than anything is the cold calls I get from IT outsourcing companies, especially the ones that have a token sales office in the US but are 100% located offshore and try to hide that fact.
You missed half of the formula: It is set directly by how much the customer is willing to spend among the options available.
As soon as transparent pricing exists (Ceridian in OP), it will garner market share. Presumably the overhead is lower (because sales people cost money), so they are probably at an advantage.
Two enterpise buyers (yep, its a profession) can buy the same number of licenses and additions ending up paying significantly different (10x) price.
[And many of those won't ever even use the product]
Given those types of sales are the ones that bring in six or seven figures of revenue, it is not surprising companies optimize for that. But that is just one of the places startups, solving focused problems, can find some blue ocean.
(But, yes, when you are in the small company, buying almost anything just sucks. You aren't big enough to even get attention, often times.)
My job depends on making the right technology decisions. I'm not just going to buy based on the price list, I'm going to buy a custom tailored product with the right price for me. And I need to talk to a sales person, and I want them to be good at selling and I want them to convince me. If a company can't be bothered to hire good sales people then they probably can't be bothered to hire good support people, or programmers either.
Enterprise is different.
Call for price isn't aimed at the author (or me). It's aimed at people who have a certain set of expectations about B2B relationships. It's aimed at people who see receptionists as a necessary business expense in all circumstances. It's aimed at people who don't trust the internet when it comes to transactions.
It's a bigger market segment than people like myself or the author.
There is no pricing information I can find on their website and they're very clearly saying for their products (in this case, on the payroll page):
Contact a Ceridian expert today for a free payroll software analysis, and you'll find a payroll processing solution that's exactly what you need, exactly the way you need it.
 Not all salespeople are evil, greedy bastards. Only the majority I've met.
Interestingly what this lack of info usually leads to is us going with services our friends and acquaintances suggests - we just don’t have the time to listen to all the salesmen.
IMHO startups are much more sophisticated in marketing. It's pretty common marketing knowledge that you want to reduce friction as much as possible. A phone call is a lot of friction for most technical people who want to be as efficient as possible.
No pricing model should be this complicated. If you have to make a form for the customer to fill out to calculate their cost, fine. To be honest even a live chat wouldn't be terrible.
I understand the people here who defend the enterprise sales cycle. I get it, I participated in that world as a startup for years. But you have to admit there's something fundamentally broken about the whole idea.
I think it comes down to this: if your product is good enough that people can use it and want it, you shouldn't have to hide your pricing or require time to use sales tactics to justify the price to customers.
I think this is naive. I've found that at the enterprise level those involved with purchasing often aren't those using the services being purchased. I spent a signifiant portion of the day yesterday on the phone with an extremely large company (~140k employees) explaining why the process they wanted to implement with our software couldn't happen as it would not be compliant with federal law and they could risk losing their billions of dollars in federal contracts. There was only one person on the phone actually involved in daily management of their process and everyone else was part of purchasing.
I was going to go with Ceridian but their web app doesn't support Mac. Because we're still small enough, I actually just rigged it up myself in Xero and then just have to use the nastiest 90s era website from my bank. That at least saved me the step of massaging exported data into Xero.
If you want some real price transparency on payroll apps, this is pretty hard to beat : http://wavepayroll.com/pricing
What millennium is this? There's no excuse for a web app needing a specific OS these days, and hasn't been for quite some time.
we're setting all our sites up with transparent pricing now.
It's also much easier to figure out misunderstanding on the phone due to the more informal nature of phone calls rather than emails.
I worry sometimes about the implications this has on democracy, where power might be defined as how strong and agile your CRM system is, rather than your actual ideas and character.
Even if you feel that payroll is a solved problem, you still need to deal with people. Anytime something is important you want a specific person in charge of it's execution. Imagine that you have a business of 50 employees and one day the payroll doesn't get processed correctly. You now have 50 angry employees on your doorstep. How much do you think they will care that you've filled out a form on a website asking for resolution? Or that you're on continuous hold with some call center op that is paid $2 a day regardless of if he solves your problem.
You pay an account rep commission so you have an individual person who's direct personal livelihood depends on a well executed service.
In the first case you know how much you ought to pay upfront and you [mostly] know what you will get. No need for call backs, conf calls or multiple meeting...
In the second case, the price to pay and the promise is unknown. But! things can go both ways - (1) good or (2) bad. And yes, you will know the outcome only after many call backs, conf calls, meeting and flirting period...
Looks like the everyone's conclusion is that those are different use cases [or market segments], so it's better for your own sake not to mix them! :-)
Wonder when companies will start to figure this out already?
I hope they've improved since then. Otherwise this person is in for a bit of a hassle.
The smart companies that want you to call them for a quote do it to make it harder for less profitable customers to come to them, without being at all an impediment for larger customers (who would want to negotiate anyway).
The dumb companies that want you to call them for a quote say "Oh look, ADP does it, we should copy it!"
It's deceptive, and it's not fair.
Funny, I never bought a copy.
Exactly what is the OP problem?
All salespeople are "vultures"???
And anybody on commission "hounds" you?
That's right only YOU have a right as an entitled person to earn a living. Everyone else is superfluous and there to serve you efficiently and at the lowest possible cost.
I have news for you. There is nothing that I like better than a salesperson that hounds me and is on commission. That's the way you sometimes get your best deal. Based on my many years of experience buying things. They are hungry to make quota and if you play it right you save money.
Go deal with clerks and order takers if you want. I'd rather deal with people hungry for my business.