They offer 4-year contracts. Publicly. Straight from the pricing page.
I sat down with John Barbieri, the architect of this new multi-year pricing motion, to learn the details.
Here is what I learned…
1) They launched this new pricing model in June 2024 as a byproduct of their move from offering multiple point solutions to one, more comprehensive suite of tools.
2) They offer this to new businesses and existing customers (pricing fairness is critical to Chili Piper, he told me). Currently, about ~6% of new business does multi-year deals, and ~22% of existing customers sign these commitments (with 18% of those being 4-year contracts). The deals are multi-year commitments but are billed annually.
3) Their positioning between monthly and annual is clever. Most brands show the percentage savings on annual versus monthly. Instead, they display annual as the default, then indicate that monthly is 50% more expensive.
4) For multi-year deals, they offer 15% off for 2 years, 25% off for 3 years, and 40% off for 4-year commitments.
5) The rationale behind the longer contracts is twofold. First, they operate in an increasingly competitive ecosystem and want to lock in market share. Second, they have strong NRR (Net Revenue Retention), so while they lose some margin through discounting, especially for existing, stable customers, their high rate of expansion within their base justifies it.
6) Enterprise brands often prefer longer deals anyway (fewer annual RFP cycles), so if you give this 4-year option, you might be surprised how many take you up on it.
Overall, it’s advantageous to challenge norms and experiment.
From my experience and chatting with John, I would say companies that would benefit from offering 4-year deals are those that:
- Have a strong expansion revenue play. Multi-year deals can boost NRR by giving you room to save churn and drive upgrades.
- Are highly embedded in core processes after implementation.
- Operate in competitive markets where securing market share is critical.
I have always been a fan of Chili Piper’s growth story, and it’s great to see them experimenting and pushing back against industry norms.
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