# Our Methodology: How SpendHound Powers SaaS Vendor Intelligence and Pricing Benchmarks

Transparent, real-company data drives SpendHound’s SaaS vendor intelligence and pricing benchmarks. This page explains exactly how we collect, process, and protect that data as well as how our two distinct methodologies work.

## Two Types of SaaS Pricing Data

SpendHound provides two complementary types of SaaS pricing data:

- Vendor Intelligence (Spend Insights)
- Product SKU-Level Pricing Benchmarks

Both are built using real company data. Neither relies on public list prices, vendor marketing materials, or anonymous surveys.

However, they use different data sources and serve different use cases. Understanding the distinction ensures the data is interpreted correctly.

| Vendor Intelligence   | Pricing Benchmarks                                   |
|-----------------------|-----------------------------------------------------|
| **What question this data answers** | How much do companies typically spend with this vendor? | Are we paying a fair price for this product/service? |
| **Best used for**                  | Vendor evaluation and budgeting                    | Price validation and negotiation                   |
| **Primary data source**             | ERP transaction data                               | Contracts & invoices                                |
| **Level of detail**                 | Vendor-level spend                                 | SKU / product-level pricing                         |
| **Data precision**                  | Directional                                        | SKU-level precision                                 |
| **Where this data shows up**       | SpendHound platform, Public vendor pages          | SpendHound platform benchmarks                      |

### Vendor Intelligence Methodology

Vendor Intelligence powers the SpendHound platform and the public vendor pricing pages available in the SpendHound Marketplace which provide spend insights from 1,000+ participating companies.

These insights show how much companies typically spend with a given vendor, based on aggregated transaction data.

#### Data Sources

SpendHound’s Vendor Intelligence data is derived from ERP transaction data shared by companies that connect their financial systems to SpendHound.

Supported systems include platforms such as:

- NetSuite
- QuickBooks
- Sage Intacct
- Other ERP and accounting systems

Companies authorize secure access through our platform. We analyze recorded vendor payments and historical spend activity directly from these systems.

We do not use:
- Public list prices
- Survey responses
- Modeled or estimated pricing

All insights are based on actual recorded vendor spend.

#### What Data We Analyze

From ERP systems, we analyze:
- Vendor name
- Transaction amounts
- Transaction dates
- Payment frequency
- Total annual vendor spend

We do not analyze contract documents, SKU-level pricing, renewal clauses, or negotiated discount structures as part of Vendor Intelligence. This data reflects aggregated vendor spend, not per-seat or per-product pricing.

#### Data Processing & Normalization

ERP data requires standardization before aggregation.

Our processing includes:

- **Vendor Normalization**: Standardizing naming variations (e.g., parent entities, billing subsidiaries).
- **Deduplication & Validation**: Removing duplicate entries and validating transaction consistency.
- **Categorization**: Classifying vendors into relevant SaaS categories.
- **Aggregation**: Combining de-identified company data into grouped insights by vendor and company size.

We publish only aggregated outputs. Raw transaction-level data is never displayed.

#### How Vendor Intelligence Is Used

SpendHound’s Vendor Intelligence is best suited for:
- Evaluating overall vendor cost positioning
- Comparing vendors at a high level
- Budget planning for new tools
- Identifying whether deeper pricing analysis may be warranted

Because they reflect total vendor spend rather than contract-level pricing, these insights provide directional market context.

## SaaS Vendor Pricing Benchmark Methodology

Pricing Benchmarks are a separate dataset used within the SpendHound platform to help companies evaluate specific SaaS contracts.

These benchmarks are built from verified contracts and invoices shared by 1,000+ participating companies.

### Data Sources

Pricing Benchmarks are derived from:
- Executed SaaS contracts
- Vendor invoices

Companies voluntarily share documentation in exchange for personalized benchmarking insights.

We do not use vendor list pricing or unverified pricing estimates.

### Data Extraction & Verification

From contracts and invoices, we extract structured pricing data such as:
- Product tier or SKU
- Per-seat pricing
- Contract value
- Term length
- Renewal pricing
- Volume metrics
- Discount levels

Each pricing data point is derived directly from source documentation before inclusion.

### Benchmark Calculations

For each vendor and segment, we calculate:
- Median pricing
- Unit pricing percentile ranges
- Pricing trends

Benchmarking cohorts are based on contract value, volume, and recency. Outliers are removed when they materially distort reliability.

### How Pricing Benchmarks Are Used

Pricing Benchmarks are best suited for:
- SKU-level price validation
- Assessing whether a quoted price is above or below market norms
- Renewal evaluation
- Contract negotiation

These insights offer contract-level precision beyond aggregated spend data.

## Data Privacy & Protection

We safeguard participating company data through strict privacy controls, de-identification, and enterprise-grade security.

### De-Identification

All company data is de-identified before being included in aggregated datasets.

Identifying company information is removed prior to aggregation and public display.

We never publish individual company pricing, contracts, or transaction records.

### Aggregated Reporting

Both Vendor Intelligence and Pricing Benchmarks are presented as aggregated insights derived from 1,000+ participating companies.

Vendor Intelligence reflects aggregated vendor-level spend and payment activity across companies. Pricing Benchmarks reflect aggregated contract-level pricing metrics such as medians and percentile ranges.

Insights are displayed only when sufficient data exists to protect company confidentiality and ensure reliability. We do not publish raw transactions, contracts, or identifiable company-level data.

### Security Infrastructure

All data is encrypted in transit and at rest. Access is restricted to authorized personnel, and system access is logged and audited. SpendHound maintains SOC 2 compliance and undergoes regular third-party audits to ensure our security controls meet rigorous industry standards.