You’ve mastered SMB pricing. Enterprise buyers operate by completely different rules.
Most SaaS leaders assume enterprise buyers are just bigger versions of SMB customers. Take your successful SMB pricing playbook, multiply by enterprise volume, and collect bigger checks. But enterprise buyers don’t think like bigger versions of SMB customers. They evaluate risk differently, budget differently, and value completely different things.
I recently joined Melissa Perri on the Product Thinking Podcast to discuss pricing alignment with product strategy. One topic that generated a particularly strong reaction was how enterprise buyers fundamentally break SMB pricing assumptions. Here’s a deeper dive into three specific ways this plays out. If you’re scaling up and starting to land enterprise deals, these differences will either blindside you or become your competitive advantage.
Topics Covered:
- Why normal distribution thinking fails when 50 users become 50,000 users
- How enterprise buyers prioritize predictability over flexibility
- What enterprises actually pay for: premium support, SLAs, governance, and risk reduction
The Outlier Problem That Breaks Everything
Enterprise Surprise: You’ve been applying SMB pricing logic to enterprise deals, but enterprise runs on outliers, not averages.
We’re conditioned from school and everyday life to think in terms of normal distributions. People’s heights, weights, test scores – they all follow predictable bell curves. “We had this drilled into us from an early age of dealing with the normal distribution,” I explained to Melissa. “This will cause you a lot of pain if you continue to think in that mindset as you go into enterprise.”
Let’s say you price per user at $20, and your average customer has 50 seats. Your pricing tiers, discount structures, and willingness-to-pay assumptions all center around this norm.
Then JP Morgan walks in wanting 50,000 seats.
“It’s not just an order of magnitude. It’s multiple orders of magnitude bigger.”
But here’s what’s really happening when you encounter these outliers: enterprise buyers are fundamentally less price sensitive than SMB buyers. They’re willing to pay significantly more to mitigate risk. Your $20/user pricing that signals “great value” to SMB customers may actually work against you with enterprise buyers.
Here’s the counterintuitive twist: your low-priced solution might signal that you lack experience with “big league” enterprise problems. When an enterprise buyer sees SMB-optimized pricing, they’re asking “Will this company scale with us?” and “Will the product fail under our enterprise load?”
Enterprise buyers evaluate Total Cost of Ownership, not just purchase price. A higher purchase price that reduces implementation risk, downtime risk, and scaling risk represents lower total cost.
Strategic Adjustment – Plan for Multiple Orders of Magnitude:
- Recognize that 50 users → 50,000 users reveals fundamentally different buyer psychology
- Design pricing for 100x scale scenarios, not 10x
- Test enterprise assumptions separately rather than extrapolating from SMB data
The Predictability Paradox
Enterprise Surprise: The usage-based pricing flexibility that works for SMB becomes a liability in enterprise sales.
Picture this scenario: Your CRO secures budget approval for a $50,000 annual software purchase. Six months later, usage spikes and the bill jumps to $150,000. Now your champion has to explain to the CEO and CFO why the “predictable” software spend tripled.
“That CRO, the CEO and the CFO do not want to have a conversation six months later” about unexpected cost overruns, I told Melissa. Enterprise planning and budgeting processes are much more heavyweight than SMB or mid-market. They value predictability and transparency over flexibility.
The result? “Oftentimes predictability and transparency are often valued more than flexibility.”
This completely flips conventional wisdom about usage-based pricing being customer-friendly. At enterprise scale, your “pay for what you use” flexibility becomes their budget anxiety.
Strategic Adjustment – Design for Predictability Over Flexibility:
- Offer larger usage buckets with buffers instead of pure pay-as-you-go
- Example: Restructure from 1-10, 11-20 users to 1-50, 50-500, 500-5,000 to accommodate enterprise scale
- Enterprise-specific flat fees for predictable budgeting
What Enterprises Actually Pay For
Enterprise Surprise: Enterprise buyers don’t just buy software. They buy outcomes and risk mitigation.
Traditional feature-focused pricing misses the biggest value drivers for enterprise buyers. While SMB customers might accept standard support and figure things out themselves, enterprise buyers gladly pay for risk reduction and outcome assurance.
Because enterprises are making larger investments, they want to minimize adoption risk and are willing to pay for more bespoke rollouts, specialized training, and dedicated project management. This isn’t about technical complexity – it’s about investment protection.
Strategic Adjustment – Monetize Enterprise Value Drivers:
Premium Support & SLAs: Package 24×7 support, tighter response times, dedicated TAMs, and named CSMs as “Support & Success” bundles rather than including them in base pricing.
Advanced Governance: Fine-grained RBAC, data residency choices, customer-managed keys, and audit exports become premium add-ons that enterprises readily pay for. These aren’t “nice-to-have” features. They’re risk mitigation requirements.
Implementation Services: Complex enterprise deployments require specialized resources. Rather than absorbing these costs, they become revenue centers that align your incentives with customer success.
Start Planning for Outliers Before They Arrive
You can’t predict everything about enterprise pricing upfront, but you can prepare for the fundamental shifts in buyer behavior and expectations. The companies that successfully scale into enterprise markets don’t just stumble into enterprise deals. They recognize that enterprise buyers operate in a completely different value framework.
As I emphasized in our conversation, “It’s difficult to know these things a priori without going into the market first.” Start testing your assumptions with enterprise prospects now, before your next outlier deal exposes every gap in your pricing strategy.
Listen to the Full Episode
You can listen to my complete conversation with Melissa Perri on the Product Thinking Podcast below:
Ready to evaluate your enterprise pricing strategy? Connect with me on LinkedIn to discuss how outlier accommodation can transform your pricing from liability to competitive advantage.