SaaStr

NOVEMBER 8, 2022

Does it cost so, so much to host a few million lines of code on AWS? As soon as your competitor cuts prices and quintuples their marketing budget … and is everywhere … can you stay out of the arms race? Raise prices tomorrow. If your competition is fierce, raise prices even more. So is SaaS cursed?

Scale 298

Scale SaaS Banking AWS 298

Blulogix

NOVEMBER 8, 2023

Transforming the Technology Industry: The Power of Usage-Based Pricing By BluLogix Team The technology industry is in the midst of a profound transformation. Traditional pricing models, such as fixed subscriptions and one-time purchases, no longer align with the dynamic and ever-evolving nature of this sector.

Technology 52

Technology Pricing Payment Features Subscription 52

SaaStr

DECEMBER 14, 2021

Commoditization From AWS & Google Cloud. The ASP was shrinking, so sales were having difficulty overcoming the objection of comparing prices to competitors. As a result, the logo churn went up, the NRR stopped increasing, and the deal rate decreased as the sales cycle got longer. Competition in the market rose sharply.

Sales Hiring 291

Sales Hiring Data AWS Leadership 291

SaaStr

DECEMBER 20, 2023

For example, Google and AWS are already ZoomInfo customers, but only certain sub-segments within those businesses – not the entire org. ” For companies like ZoomInfo, their tech cohort of customers went from its fastest-growing for two decades running to now reducing spend or just churning outright.

New CTO 276

New CTO Scale Sales Hiring CTO Hire 276

Clouded Judgement

MARCH 22, 2024

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.

AI 183

AI Revenue Cloud Technical Advisors 183

SaaStr

MAY 19, 2019

Churn is 1.1% Most of the companies in this 5 Interesting Things Series have had net negative churn from SMBs (e.g., Xero’s SMB churn isn’t zero. Inclusive of upsells and churn, their ARPU is $29.25 But, they were also able to raise prices. They also raised effective prices, however. subscribers.

SMB 221

SMB Customer Lifetime Value AWS Churn 221

SaaStr

NOVEMBER 24, 2021

Salespeople are often compensated at the highest rate when they win brand new business, but that might not be good for revenue expansion and might contribute to churn. Pothole #2 – Increasing Pricing Rate Without a Sustainable Moat. Sell it to your market for half the price. And it can take so long to equate that value.

Sales Hiring 205

Sales Hiring Scale Compensation Sales 205

OpenView Labs

MARCH 4, 2021

For their first five years in business, HubSpot offered three subscription packages ranging in price from $3,000 to $18,000 per year. The company struggled with poor churn and anemic expansion revenue. So in 2011, they introduced usage-based pricing. This pricing change allowed HubSpot to share in the success of its customers.

Pricing 55

Pricing Outsourced Development Marketplace as a Service AWS 55

Tom Tunguz

NOVEMBER 17, 2014

Negative churn is an incredibly attractive characteristic of a SaaS company because it means that customer accounts are like high-yield savings accounts. The concept of negative churn is a bit amorphous so let’s illustrate the impact on a startup. Contrast this with a company which has achieved 5% negative churn.

Churn 103

Churn AWS Startup Revenue 103

SaaStr

NOVEMBER 14, 2023

Then, we moved to a more customer-friendly model with SaaS and subscription-based pricing. What’s evolved over the years and is driven by hyper-scalers like Google Azure, AWS, Twilio, and Stripe is the consumption-based model. Key Takeaways Consumption-based pricing requires rethinking your organization. The lines will blur.

Compensation 182

Compensation Sales Azure AWS 182

SaaStr

JUNE 26, 2024

Then, MongoDB lowered to 12% growth from 57%, and even though there isn’t more logo churn, people are trying to use it less to manage spend. Maybe endless price increases,” Jason says. You can see the growth on the platform side with Azure, Google, and AWS and how much it’s accelerating in AI. To some extent, it’s not clear.

CTO Hire 147

CTO Hire AI Venture Capital Sales Hiring 147

Tom Tunguz

NOVEMBER 4, 2014

Most startups play defense when discussing pricing with customers. They use pricing as an offensive tool to reinforce their product’s value and underscore the company’s core marketing message. For many founding teams, pricing is one of the most difficult and complex decisions for the business.

Pricing 114

Pricing Startup SaaS Payments Payment Methods 114

CloudGeometry

MARCH 3, 2022

Feature value: a function of time investment of users and customers The set of problems that your SaaS solves won’t survive long in the digital age if all it does is cut prices. Unsubscribers, known as churn, also factor into your monetization equation.

Well Architected Framework 130

Well Architected Framework VPCs (Virtual Private Cloud) SaaS Cloud 130

OpenView Labs

FEBRUARY 3, 2022

Usage-based pricing (UBP) , also known as consumption-based pricing, allows customers to pay for products according to how much they use. 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.

Headcount 73

Headcount SaaS Compensation Acquisition 73

Clouded Judgement

AUGUST 11, 2023

The good news is gross retention (ie churn) stayed constant. The hyperscalers (AWS, Azure, GCP) are seeing some uptick, but this is largely from selling compute (ie cloud GPUs). Not quite… The earnings call gave us more detail, and painted a more positive picture than just the numbers may suggest.

Cloud 130

Cloud Trends Azure GCP(Google Cloud Platform) 130

Baremetrics

MARCH 30, 2021

1 Chargebee Vs. Zuora Chargebee Zuora Similarities 2 Chargebee Vs. Zuora Pricing 3 Chargebee Vs. Zuora: Target customer size 4 Chargebee Vs. Zuora: Ease of Use 5 Chargebee Vs. Zuora : Customer support What suits your business? Their integration to SF is also quite awful, and most of the time, the data does not appear. Let's find out.

Payment Solutions 105

Payment Solutions Payments Payment Features Payment Methods 105

ProfitWell

SEPTEMBER 10, 2020

Running your own server to handle your customer's valuable data requires a huge investment to match the same level of security and reliability that comes baked into services like Amazon AWS and Microsoft Azure cloud. This, in turn, helps reduce churn. Pricing Changes. Optimize your pricing. Pricing is tricky to get right.

SaaS Payments 66

SaaS Payments Trends Merchant Services Payments 66

SaaStr

JUNE 1, 2021

It just is, and then when you get them, they churn at a higher rate, and so it’s like the math just doesn’t work. One of the challenges with that, one of the requisites, in order to start charging money, is you have to come up with a price. ” “Yep, we need a price.” ” “Done.”

Part-Time VPE 246

Part-Time VPE Technical Cofounder CTO Hire New CTO 246

OpenView Labs

SEPTEMBER 13, 2019

The prototypical company with a Customer Success team is a high-priced subscription business with 12–24 month contracts. But what about companies where the majority of revenue is tied to a variable component of their pricing model? With value-based pricing , costs are tied to a value metric that aligns with usage.

Customer Success 43

Customer Success Revenue AWS Retention 43

Chart Mogul

JUNE 23, 2022

You might be hard-pressed by your AWS bill but you’re not going to start replacing the engine to lighten the load mid-flight. The last 2 years of SaaS twitter summed up sales into two simplistic formulas for achieving growth: PLG & raising prices. This is one of the tactics SaaS companies use to shore up churn.

SaaS 52

SaaS DevOps as a Service Marketplace as a Service Forecasting 52

ProfitWell

MAY 15, 2020

Google Compute Engine (GCE), Digital Ocean, and Amazon Web Services (AWS) are all good examples of IaaS. With ProfitWell, you can easily use our products to manage your pricing while also managing your billing through a service like Stripe. Annual contracts are the best in terms of reducing churn. Minimal commitment.

SaaS Payments 75

SaaS Payments Payment Services Payment Solutions Payments 75

ProfitWell

NOVEMBER 5, 2019

For subscription companies, it’s tempting to resort to questionable subscription renewal tactics like these to keep customers around for as long as possible, since churn can be so disastrous to your bottom line. Automatic renewals prevent forgotten payments, which helps improve retention and combat customer churn.

Payment Features 49

Payment Features Subscription Payment Methods Merchant Services 49

SaaStr

OCTOBER 31, 2019

It was around that time about 12 years ago that Jeff Bezos launched AWS, and some of you may remember that, when he did this, Wall Street analysts were looking at him and saying, “Why would you take what’s already a very unprofitable business and drive it further into the red by investing in this AWS initiative?”

Cloud 101

Cloud Scale AWS Machine Learning 101

SaaStr

JULY 10, 2020

Get back into experimentation mode with our business model, with our pricing, to really think about not just how we can shrink costs, but inflect growth on the top line so we could ultimately control our own destiny, which is in fact what we did. Shifting to the fifth is around pricing. So pricing is obviously a very powerful lever.

Scale 208

Scale Sales Hiring Pricing Sales Recruiting 208

SaaStr

MARCH 31, 2024

Also, don’t miss out on discounted prices for SaaStr Annual 2024 tickets. ” “I hated Katie at that company meeting, it was awful.” But employee churn in the Bay area is epic. As a KPI from this, do you try to drive down employee churn? ” “Our benefits are terrible.” Maintain it?

Part-Time CTO 281

Part-Time CTO CTO Hire CTO Coach CTO 281

OpenView Labs

FEBRUARY 11, 2021

Pricing wars are another source of margin compression. While it’s true that there are no bad margins, you maximize them when your product ranks high on the buying hierarchy of functionality, reliability, convenience, and price. Whether working directly with the monopoly or the reseller, avoid paying list price.

Scale 52

Scale Payment Methods Payment Services Systems Review 52

SaaStr

JUNE 3, 2020

Then we went on to build another company called SteelBrick, another SaaS configure price quoting solution. And G2 Gives, we partner with philanthropies, we partner with some of our customers like AWS and Google Cloud, who can then make donations for every review, to thank their customers. And that company grew very quickly.

Software Review 200

Software Review Scale Technical Review SaaS 200

Chart Mogul

DECEMBER 22, 2021

We also added support for relationship invoicing, recurring components, cancellations, discounts, differential pricing, and the option to exclude tax from your MRR calculations. This year, we also migrated ChartMogul to AWS cloud. The new integration now lets you audit your billing data within ChartMogul’s Data Platform.

Software Review 52

Software Review Systems Review Payment Features PayPal 52

Outseta

JANUARY 20, 2020

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?

SaaS Payments 145

SaaS Payments Sales Hiring Payment Methods Payment Services 145

Chart Mogul

FEBRUARY 19, 2018

There are many use cases for sending data from Segment to ChartMogul, such as: Pushing product usage data to ChartMogul to understand the impact of specific feature usage on churn rate. Pushing marketing campaign data to ChartMogul to understand which campaigns are delivering customers with the highest average sale price.

Data 58

Data Churn AWS Data Integration Services 58

OpenView Labs

DECEMBER 13, 2019

That’s certainly true in developer tooling (AWS), sales and support (Salesforce), MarTech (Adobe), commerce (Square), HR tech (Workday) and even vertical markets (Veeva). Investors look closely at retention rates as a signal of customer health, product stickiness, competitive differentiation and pricing power. SaaS is now ubiquitous.

Sales Hiring 52

Sales Hiring Benchmarks AWS Scale 52

OpenView Labs

MAY 20, 2019

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.

Scale 70

Scale Startup Technical Review Software Review 70

OpenView Labs

JUNE 25, 2019

Keep in mind, the MRR figure used in this calculation should include net new MRR which in a given period is equal to MRR from new customers plus expansion MRR from existing customers less churn MRR from lost or downgraded customers. Pricing, though, is, in fact, the most impactful near term lever to improve your gross margin.

Scale 40

Scale Development Team Review Software Review Benchmarks 40

OpenView Labs

MAY 20, 2019

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.

Scale 51

Scale Startup Technical Review Software Review 51

OpenView Labs

MAY 20, 2019

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.

Scale 40

Scale Startup Technical Review Software Review 40

SaaStr

JANUARY 28, 2020

And I remember being at that Dreamforce in 2009, which was awful. The SMBs during the recession churned at a massive rate, right? Our monthly self-service churn went from like 3% to like 9%, right? And churn got higher than the SMEs, but we all came out of this recession saying, “We kept all of our logos.”

Sales Hiring 217

Sales Hiring Scale Underperforming Technical Team Sales Recruiting 217

ProfitWell

SEPTEMBER 25, 2019

One of the most famous lines from Citizen Kane is, “It's no trick to make an awful lot of money, if that's all you want is to do is make a lot of money.” It is vital for mapping out values: what value to offer in the market, how it’s priced, and how it’s paid for by your customers. If only that statement were as true as it seemed.

Payments 40

Payments Revenue Payment Methods SaaS Payments 40