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We want you to look at pricing the same way you look at other business functions, because at the end of the day pricing is the greatest leverage that you have on your bottom line.  Empower your organization to be in tune with your customers and always be optimizing for profits. If you remember nothing else from this post – remember these few points.

  • Pricing is a constant process that is fueled by tons of customer data

  • A pricing committee is the strong grip of a hand that cranks your pricing lever

  • You should be evaluating every quarter and making sure that your personas are quantified

  • You should be making minor changes every three months, and major changes every six

  • Improve your product so that you can improve your pricing. 1% increases in price yield 11% increases in profit.

PriceIntelligently

More SaaS + Software Stats

How Often Should The Pricing Committee Be Meeting And Making Changes?

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

More Growth Strategy Stats

80% of venture capital investments take place in the enterprise

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

Internet Sales strategies have a significantly lower CAC of just $0.42

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

Three uses for the SaaS Guidelines

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

55% of SaaS companies rate Customer Retention as the key metric to measure

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms