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

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

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

80% of venture capital investments take place in the enterprise

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

More Growth Strategy Stats

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

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

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.

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 average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

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

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

SaaS IPOs have more than doubled over the last 12 years

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”