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Why do software vendors ask for organization's yearly revenue

Posted on 2016-09-20
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Last Modified: 2016-09-20
In one vendor's visits, they asked the client yearly revenue.  Is that important in  an initial vendors visit in order to present a quote?  Whys is this question asked every time?
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Question by:rayluvs
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by:pony10us
pony10us earned 250 total points
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Not really enough information to give an accurate answer.

I do know that if this is proprietary software built for a specific industry such as banking software for the bank's core system, then they often price their software based on annual revenue.  

I believe the idea is that the more the bank revenue the more customers they have so it is a strange method of charging based on user.  Since the total number of customers changes almost by the minute in the banking industry it would not be feasible to charge based on customer base however the annual revenue is the annual revenue so the set price points based on that.

Hope that helps a little.
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Bill Bach earned 250 total points
ID: 41807028
For an ERP/Accounting system, a vendor might need this info to determine pricing, but it can ALSO help determine expected longevity and overall budget.  For example, someone generating 3M/year in revenues isn't likely to afford a $500K software solution.  I agree that it really shouldn't matter, especially as a reseller -- we just want to quote the right pricing.
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by:rayluvs
ID: 41807137
Good enough! Thanx!
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