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CORE
EDGES
How to price Enterprise Social Computing
o\ufb00erings?
Value and utility pricing through Volume-
Increasing price structures

Julien Le Nestour
www.coreedges.com
jln@coreedges.com
@jnestour

February 09
CORE
EDGES
CORE
EDGES
Link to accompanying post
Current situation
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A classic Volume-Discount pricing scheme is the most common structure used
for Enterprise Social Computing o\ufb00erings
$
N
Dollar scale
Average cost for the organization of a new
user active on the application

Enterprise Social Computing application vendors have generally adopted a classic Volume-
Discount pricing scheme: the price per user is decreasing as you buy access for more
employees.

AverageCo s t
per user
Price is usually capped
after a threshold

Users scale (here
in total number
of users)

Number of active users (absolute number)
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CORE
EDGES
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10000
20000
40000
60000 100000
Variations like\ufb02at pricing may occur, but most usually fall back to the same old
and classic Volume-Discount pricing scheme
$
N
Flat price per user announced as
a list price

Some vendors choose to display a\ufb02at price per user per period as a list price. But of course,
it\u2019s nothing more than classic Volume-Discount pricing after a \u2014 usually low \u2014 threshold.
The same can be said for thresholds in number of users (pay this for up to 10 users, than you
pay this for up to 100, etc.).
The main e\ufb00ect of these variations is to disconnect the marginal and average cost per user.
The trend for the latter remains the same however.

AverageCo s t
per user
Number of active users (absolute number)
AverageCo s t
per user
But of course you negotiate when you\u2019re big
and fall back to Volume-Discount
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Current situation
Link to accompanying post
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