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Enough to pay some salaries and AWS bills, but it’s not that much. And human churn. You start making up for it in volume — with headcount. Yes, you now know how to make customers successful and happy now. But it is so slow. You have 2,000 customers now. But at $10/mo, that’s still just $20,000 a month.
Enough to pay some salaries and AWS bills, but it’s not that much. And human churn. You start making up for it in volume — with headcount. Yes, you now know how to make customers successful and happy now. But it is so slow. You have 2,000 customers now. But at $10/mo, that’s still just $20,000 a month.
At contract expiration these customers either renew (sign another contract with same annual value), expand (sign another contract with higher annual value), contract (sign another contract with lower annual value), or churn (stop being a customer and spend goes to zero). It’s probably better described as re-occurring vs recurring.
AWS and other infrastructure providers have been using UBP for nearly a decade. Fast growers retain and expand new customers, resulting in net negative churn. Low churn shows the product is sticky, hard to replace, and truly generating value for customers. Fast growers are much more likely to employ a usage-based model.
In this post I’m going to share the most important lessons about growing a SaaS business that I learned at Buildium—collectively, these things had an awful lot to do with the company being valued so highly. This required no additional addressable market and also helped to drive down Buildium’s churn rate. How the hell does that happen?
That’s certainly true in developer tooling (AWS), sales and support (Salesforce), MarTech (Adobe), commerce (Square), HR tech (Workday) and even vertical markets (Veeva). We’re seeing three drivers of lower lifetime value: feature commoditization, less pricing power (price wars), and worsening churn. Now it’s table stakes.
Universal churn settings — you now can harmonize how you recognize churn (at the time of cancellations vs at end of the service) across 4 new billing systems (Chargebee, GoCardless, Zuora, and Google Play) in addition to the existing 6 we offered historically (Stripe, Braintree, Recurly, Chargify, Paypal, and ChartMogul API).
That’s certainly true in developer tooling (AWS), sales and support (Salesforce), MarTech (Adobe), commerce (Square), HR tech (Workday) and even vertical markets (Veeva). We’re seeing three drivers of lower lifetime value: feature commoditization, less pricing power (price wars), and worsening churn. Now it’s table stakes.
That’s certainly true in developer tooling (AWS), sales and support (Salesforce), MarTech (Adobe), commerce (Square), HR tech (Workday) and even vertical markets (Veeva). We’re seeing three drivers of lower lifetime value: feature commoditization, less pricing power (price wars), and worsening churn. Now it’s table stakes.
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