Improve Your Pricing Schedule And Turn More Profit

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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.

More SaaS + Software Stats

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

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

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

More Growth Strategy Stats

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

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

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

Google only has a 30 percent female workforce

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

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.

26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available