SaaStr

NOVEMBER 28, 2024

The good news is, you can support these price points effectively with a very efficient inbound sales team, and/or a mix of self-serve and sales-led. At two different price points. Churn is all over the place with SMBs. There’s a whole other category of apps SMBs and SMEs can afford that cost $99-$299 a month or so.

Payment Solutions 265

Payment Solutions Inbound Sales Team Marketing Scale 265

SaaStr

APRIL 26, 2021

Everyone seemingly became an expert in churn. Your churn rate should be 0.123909% per month. Churn is not a GAAP metric. In fact, Christoph Janz had a great post a ways back noting how even public companies define churn differently. But they excluded churn in the first 60 days. It should be net negative.

Churn 280

Churn Retention Metrics B2B 280

SaaStr

AUGUST 16, 2021

We put out a call on Twitter the other day for folks’ best tips on what has really lowered churn for them this year. “1/ Divide your churn into manageable and unmanageable areas 2/ Strip out definable areas of churn reason (e.g. Are you segmenting churn? High usage can still mask churn.

Churn 329

Churn Sales Hiring Headcount Technical Review 329

SaaStr

JULY 14, 2020

With SaaS sales, annual price or monthly price that’s billed annually? No hiding the monthly option, no pricing confusion: In fact, 26% of Zoom’s customers still pay monthly, even at $1b+ in ARR: More here: 5 Interesting Learnings From Zoom. Yes, nominal churn may seem lower by removing a monthly option. As It IPOs.

Pricing 306

Pricing Scale Payment Solutions SaaS Payments 306

SaaStr

AUGUST 9, 2021

Everyone talks about hitting 120%+ NRR these days But the truth is, single-seat users & very small businesses churn at a high rate. That sort of churn hurts. Even modestly decreasing churn in Very Small Business and single seat accounts can have a big impact. Raise Prices. Often 3% a month. More here.

Churn 312

Churn Payment Methods Payments Payment Solutions 312

SaaStr

DECEMBER 19, 2024

Worst case, they still use it and are happy, and churn less. Raising prices may or may not work for you. Best case, your happy customers buy more from you. All the best are now multi-product. And most of us regret not having gone there a bit earlier. A related post here. #6. Launch a truly more valuable, new higher-end edition.

Sales Hiring 287

Sales Hiring SaaS Venture Capital Healthcare 287

SaaStr

FEBRUARY 28, 2019

I remember the first time I tried to do the Old Price-Raise-Without-Notice tactic. But as time went on, we got a bit better at pricing ?? Just to increase Qualcomm to the same pricing everyone else had at their bracket. I canceled the price increase. Price increases on existing customers always lead to churn.

Pricing 273

Pricing Payment Features B2C Churn 273

SaaStr

JULY 24, 2023

So price increases have been the name of the game in SaaS for the past 12 months, in many (not all) cases to help make up for slowing growth: Zendesk up 16% Salesforce up 9% Google Workspace up 20% HubSpot up 12% Webflow up 16% Shopify up 33% Slack up 10% And some of them like Slack and Salesforce hadn’t raised list prices in quite some time.

Pricing 246

Pricing Software Review Churn SaaS 246

SaaStr

DECEMBER 17, 2021

Pricing is one of the most challenging elements to get right for SaaS companies. How much should you charge, and what pricing model works best? In an era of empowered buyers, vendors should take care to remove obstacles from the pricing process or risk losing the customer to a competitor.

Pricing 264

Pricing Scale Retention AI 264

SaaStr

FEBRUARY 12, 2025

The Revenue Impact This deep customer focus has significant financial implications: Higher ACVs : Deep industry-specific functionality commands premium pricing compared to horizontal solutions. Lower Churn : When software is deeply embedded in industry workflows, switching costs become naturally high.

Construction 255

Construction Scale SaaS Travel 255

Clouded Judgement

NOVEMBER 18, 2024

As far as an expected timeline - typically companies launch their roadshow ~2-3 weeks after filing their initial S-1 (the roadshow launches with an updated S-1 that contains a price range). After the roadshow launch there’s typically ~1-2 weeks before the stock starts trading.

Benchmarks 299

Benchmarks Payments Payment Services SaaS Payments 299

SaaStr

APRIL 30, 2022

One is your churn. SaaS businesses have churn. Churn, think we’re all familiar with what churn is. Churn defines your average lifetime of your customer. We talked about churn. Five percent monthly churn gives you a 20 month average lifetime. MRR, obviously. Average Revenue per Customer.

SaaS Payments 246

SaaS Payments Metrics Payment Methods Scale 246

SaaStr

MAY 7, 2024

What I mean what you want is a pricing structure that anticipates discounts so the net effect is revenue positive. Later, when you implement a CPQ and other more sophisticated systems to manage pricing for a large sales team, these processes and systems will be designed to help you do just that, at least in part.

Pricing 290

Pricing Churn Enterprise Branding 290

Blulogix

DECEMBER 5, 2024

By BluLogix Team Navigating Complex Pricing Models in the Subscription Economy Introduction In the subscription economy, Managed Service Providers (MSPs) must adapt to increasingly complex pricing models to meet the evolving needs of their customers. Gone are the days of simple, one-size-fits-all pricing.

Payment Features 59

Payment Features Subscription Pricing Technical Review 59

SaaStr

AUGUST 15, 2020

But the end-user usage just never appeared … In SaaS, it actually takes until Year 3 for your customers to churn out from low engagement / low usage. OK, just renew at last year’s price. Well, if we do, let’s get a big price cut if usage isn’t high. Churn is a lagging indicator. Should we renew?

AWS 338

AWS Churn Enterprise Engagement 338

SaaStr

DECEMBER 2, 2020

And No, It Wasn’t… Raise prices 20% — on new customers. Pricing is not a science, even in B2C companies. Raise prices 20%. Discounting back to your old list price even if far better than discounting from your old list price. Decrease churn. Less churn = more revenue … and many other benefits.

Scale 322

Scale Sales Hiring Sales B2C 322

Tom Tunguz

MAY 16, 2024

Both the companies with negative account retention still see relatively minor account churn : 15-25% account churn at these price points is common. OpenAI reduced prices by 50% this week driving deflation in the market. On average, these AI businesses are growing customer counts 105% ; the median is 38%.

AI 300

AI Churn Trends Pricing 300

SaaStr

DECEMBER 27, 2020

New Relic’s net negative churn / net dollar retention has dropped to 98% in the last quarter, despite a record 77% of revenue being from the enterprise. Do whatever you can to drive up NRR / net negative churn. New consumption pricing model has increased revenue 15% where rolled out. This is a big take-away.

Scale 342

Scale Outsourced Development SMB Cloud 342

SaaStr

SEPTEMBER 5, 2022

Secret #2: Pricing. Many product-led companies do not go to market with the right pricing. These pricing frameworks can seem appealing, but they fail to capture the appropriate value in the heavy usage of a product. PLG companies are constantly fearful of high churn rates, and for good reason. Secret #4: Stickiness.

Sales Recruiting 291

Sales Recruiting Business Pricing Churn 291

SaaStr

FEBRUARY 25, 2025

Many vendors offer special event pricing or extended trials, creating additional value. Sessions often cover specific benchmarks for customer acquisition costs, churn rates, expansion revenue, sales efficiency, and other SaaS-specific metrics.

Sales Recruiting 195

Sales Recruiting Scale CTO Hire Sales Hiring 195

FastSpring

MAY 25, 2023

FastSpring previously presented on SaaS fees pricing and packaging to combat stagflation in 2022, but this article is based on an updated presentation delivered in March 2023 by David Vogelpohl. This article offers tips for optimizing pricing and packaging of your SaaS products in a less-than-stellar economy: What is stagflation?

SaaS Payments 148

SaaS Payments Pricing Payments Merchant Services 148

SaaStr

APRIL 26, 2023

Most of the website / presence growth came from price increases, which saw limited churn as a result. Churn was modest from their price increase, leading to material growth. Relatively inexpensive products selling to SMBs that are truly valuable don’t see much increased churn from moderate price increases. #3.

Scale 298

Scale SMB Churn Pricing 298

SaaStr

APRIL 8, 2020

Click here for ChartMogul’s free-forever launch plan that will give SaaS businesses access to the world’s first subscription data platform so they can analyze and improve key metrics like MRR, churn and LTV. Profitwell’s Free Pricing and Retention Audits. What are they all about? What are they all about?

Artificial Intelligence 308

Artificial Intelligence Machine Learning SaaS Consulting 308

SaaStr

APRIL 10, 2024

Many in SaaS have found a way to drive their ACV and ARPU up over the past 18-24 months with price increases, more products, and more. Still, at this maturity, even a modest increasing in ARPU makes a difference, and pricing is up 4%. ARPU Up 4% at $139.38 But DropBox’s ARPU has stayed relatively flat the past few years.

Scale 306

Scale Churn Scaling Pricing 306

SaaStr

OCTOBER 18, 2023

Moving From Per-Seat Pricing to Consumption-Based Pricing, and See a Revenue Lift from It The analytics space has mixed models here, but Domo is moving to consumption-based pricing in part to ensure every employee at a customer that can use Domo, does use it. 30% of the Sales Team Churned in 2022.

Entrepreneurship 306

Entrepreneurship Enterprise Pricing Churn 306

SaaStr

DECEMBER 16, 2021

So here’s a quick reminder on how to calculate these numbers: GRR = (ARR at the Start of Year – Churn – Contractions) / ARR at the Start of Year. NRR = (ARR at the Start of Year + Expansions – Churn – Contractions) / ARR at the Start of Year. Pricing & Packaging . Is it contacts, storage, API calls?

Strategy 276

Strategy B2C Scale Payment Features 276

Tom Tunguz

DECEMBER 26, 2022

Price Increases. Customer Churn. -5%. New bookings added 10% ; price increases 5%. Contraction & churn reduced growth by 8%. Leonard’s letters reveal a different mentality to building a software behemoth. Growth Source. Acquisition. New Bookings. Contraction. -3%. Net Growth. Acquisitions increased revenue 33%.

Software Review 295

Software Review Investment Software Acquisition 295

SaaStr

DECEMBER 4, 2023

Churn increase due to greater scrutiny of costs Contract values declining More stakeholders involved in decision-making Capchase combined the study with their data set of thousands of SaaS companies and looked at what the best companies do to overcome these hurdles. It could be price, product composition, or payment terms. The answer?

SaaS Payments 288

SaaS Payments Payment Services Payments Payment Features 288

SaaStr

MAY 22, 2024

And its stock price is up +35% the last year, and +192% the past 5 years: 5 Interesting Learnings: #1. About 104% Effective NRR Gartner sees about -18% gross revenue churn, but price increases add +3% back, and additional research and purchases add +19%. It’s a lot bigger than I’d realized today. Not too shabby!

Revenue 299

Revenue Enterprise Cloud Pricing 299

SaaStr

SEPTEMBER 26, 2019

Housing prices apparently are falling in the Bay Area. What we learned from ’08-’09 in SaaS: First, SMB churn went through the roof — as SMBs went under much more quickly and often. Anyone processing a lot of SMB and credit-card deals saw churn probably double. Assume SMB churn doubles — and quickly.

SaaS Payments 280

SaaS Payments Sales Hiring Scale SMB 280

SaaStr

DECEMBER 19, 2019

Many see this price point as not scaleable. But no big boost from net negative net churn. But in the end, it is providing more products and more value at the same price point. This counters the narrative of always raising prices on customers as you sell them more stuff. With a $10k ACV. But HubSpot proves otherwise.

Outsourcing Services 363

Outsourcing Services Scale SMB Pricing 363

SaaStr

JULY 31, 2022

The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long. SMB SaaS has a lot going for it, but one big existential challenge — inherent churn. SaaS Pricing Strategies that Work: How to Design an Optimal Pricing Model with FastSpring VP Product. Here’s what to do about it.

New CTO 306

New CTO CTO SMB Venture Capital 306

SaaStr

MAY 15, 2024

Churn is much higher on consumer subscriptions, but you have higher expansion revenue. If you’re in consumer, how can you go upmarket and get a small cohort of users paying more, churning less, and expanding revenue? You need 50M active free users to build a paid business, no matter the price. average realized LTV.

Subscription 307

Subscription Payment Features B2B Mobile 307

SaaStr

MARCH 10, 2020

Some did try to renegotiate price down in the renewal, but not that many. SMBs started to go under at an accelerating rate, and churn there doubled. The smaller the customer, the greater the increase in churn. No one went under, and everyone still maintained some sort of budget for the next year.

Sales Hiring 350

Sales Hiring SaaS Churn Enterprise 350

Blulogix

NOVEMBER 8, 2024

By BluLogix Team Product-Level Revenue Analysis for Strategic Pricing Product-Level Revenue Analysis for Strategic Pricing Pricing is one of the most powerful tools a business has to boost profitability, and understanding how each product or service contributes to revenue is crucial for setting the right pricing strategy.

Pricing 52

Pricing Revenue Strategy Acquisition 52

SaaStr

MAY 25, 2020

In your pricing. “Help people buy how they want to buy and be as transparent as you can with pricing ” – Ken Edwards, Sales leader, Uberflip. “Flat pricing for paid pilots” — CEO & Co-founder, ToneDen. Next up would be pricing and pricing plans structure. In your messaging.

Sales Hiring 344

Sales Hiring Sales Outsourced Development Technical Review 344

SaaStr

DECEMBER 27, 2023

Digital Ocean is only growing 16% now at $700m ARR, and churn is up and NRR down. Still Pushing ARPU Up, Churn Stable — But NRR Way, Way Down This Year Digital Ocean has small customers and tiny ARPUs, but pushing the ARPU up a bit has a huge impact on a percentage basis. Churn Stable. It’s gotten crazy good.

Scale 298

Scale AWS Azure Cloud 298