Improve Your Pricing Schedule And Turn More Profit

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.

SaaS + Software Stats

• Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
• 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
• High-growth companies generate 60% fewer sales opportunities than low-growth companies
• Internet Sales strategies have a significantly lower CAC of just $0.42
• Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing
• To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)
• More than two thirds of SAAS companies experienced annual churn rates of 5% or higher
• SaaS solutions have the highest security features with 95% security failures due to human error
• Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

SaaS & Tech Growth Strategy Stats

• If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business
• A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses
• In 2017, the global adoption rate for biotech soybean amounted to 77 percent.
• SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)
• SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer
• The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel
• Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?
• In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.
• Growing faster has twice as much impact on share price as improving margins