Post on 16-Apr-2017
Happy customers big and small
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and tech enabled services
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businesses
We love talking about acquisition
@PriceIntel
0%
25%
50%
75%
100%
Acquisition Monetization Retention
% o
f to
tal a
rtic
les
Category of growth articles written from 2014 to 2106
N = 25,679 blog posts written between 2014 to 2016
We love building for acquisition
@PriceIntel
0%
25%
50%
75%
100%
Acquisition Monetization Retention
% o
f to
tal c
om
pan
ies
Category of B2B SaaS companies
N = 8,324 companies currently active
What’s most important?
@PriceIntel
0%
25%
50%
75%
100%
More logos Making more money per customer
Keeping customers around longer
% o
f to
tal c
om
pan
ies
C-Level/Founder Growth Preferences
N = 1,432 SaaS companies
What’s most important?
@PriceIntel
N = 1,432 SaaS companies
0%
25%
50%
75%
100%
Acquisition Monetization Retention
% o
f to
tal c
om
pan
ies
C-Level/Founder Spend Their Time
Competition is growing
@PriceIntel
N = 289 SaaS companies
0
2
4
6
8
10
12
5 Years Ago 3 Years Ago 1 Year Ago Today
# o
f Co
mp
etit
ors
How many competitors did you have during the following periods?
The relative value of features is declining, making a race to the bottom for feature based
pricing.
@PriceIntel
“Differentiation” isn’t what is used to be…
@PriceIntel
N = Varies by line, but minimum of 10,000 customer respondents per line
0%
25%
50%
75%
100%
125%
4 Years Ago 3 Years Ago 2 Years Ago 1 Year Ago Today
WT
P as
% o
f WT
P 4
Year
s A
go
Willingness to pay over time relative to WTP 4 years ago
Core Features Single Sign On Integrations Analytics
Impact of improving each growth lever
@PriceIntel
3.32%
0%
5%
10%
15%
Acquisition Monetization Retention
% im
pac
t on
th
e b
ott
om
lin
e
Impact of improving each lever by 1%
N = Data from 512 companies
Impact of improving each growth lever
@PriceIntel
3.32%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
% im
pac
t on
th
e b
ott
om
lin
e
Impact of improving each lever by 1%
N = Data from 512 companies
Impact of improving each growth lever
@PriceIntel
3.32%
12.70%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
% im
pac
t on
th
e b
ott
om
lin
e
Impact of improving each lever by 1%
N = Data from 512 companies
What we find important
@PriceIntel
0%
25%
50%
75%
100%
More logos Making more money per customer
Keeping customers around longer
% o
f to
tal c
om
pan
ies
C-Level/Founder Growth Preferences
N = 1,432 SaaS companies
What works for growth
@PriceIntel
3.32%
12.70%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
% im
pac
t on
th
e b
ott
om
lin
e
Impact of improving each lever by 1%
N = Data from 512 companies
Buyer Personas
Table Stakes Tony
• Valued features: • SFDC Integration• Chrome extension
• Least valued features• Analytics• API access
• WTP = ~$10/month• CAC = ~$22• LTV: $160
Advanced Arnie
• Valued features: • Analytics• API Access
• Least valued features• Chrome extension• Premium support
• WTP = ~$25/month• CAC = ~$56• LTV: $325
@PriceIntel
We don’t know our buyers that well
@PriceIntel
0%
25%
50%
75%
100%
Thought about them Central document Quantified buyer personas
% o
f R
esp
on
den
ts
Which single category best describes your buyer personas?
N = 1,432 SaaS companies
We don’t do a lot of cust dev conversations
@PriceIntel
0%
25%
50%
75%
100%
Less than 10 11 to 25 26 to 50 51+
% o
f R
esp
on
den
ts
# of cust dev conversations
How many cust dev conversations are you having per month?
N = 1,432 SaaS companies
We don’t send any cust dev surveys
@PriceIntel
0%
25%
50%
75%
100%
0 1 2 3+
% o
f R
esp
on
den
ts
# of cust dev surveys
How many cust dev surveys are you sending each month?
N = 1,432 SaaS companies
We aren’t truly testing that much
@PriceIntel
0%
25%
50%
75%
100%
0 1 to 3 4 to 10 11+
% o
f R
esp
on
den
ts
# of tests/experiments
How many tests or experiments are you running each month?
N = 1,432 SaaS companies
Basic Plus Premium
$49 $149 $299
I only have one cool feature. The same cool feature. Yup, same one.
Oh! You can only get this here. Well…and here.
Huzzah! I’m the plan with absolutely everything.
@PriceIntel
Everything aligns to the customer
Point of Conversion
Drive Customer #1
Justify price #1
Justify price #2
Drive Customer #2Drive Customer #3
Justify price #3
Path for a recovering acquisition addict
• Quantify you buyer personas
• Implement a customer development process
• Go beyond feature based differentiation
Persona-Pricing Fit
Table Stakes Tony
• Valued features: • SFDC Integration• Chrome extension
• Least valued features• Analytics• API access
• WTP = ~$10/month• CAC = ~$22• LTV: $160
Advanced Arnie
• Valued features: • Analytics• API Access
• Least valued features• Chrome extension• Premium support
• WTP = ~$25/month• CAC = ~$56• LTV: $325
@PriceIntel
Understanding your customer
Customer/Market Research
Communication Plan
Week: 1 2 3 4 5 6 7 8 9
Impact Analysis
Customer Advisory
Panel
ImplementChanges
Step:
What will drive retention and better monetization?
• UX
• Service/Just do it for me
• Value metric based pricing
What should gross churn look like?
0
2
4
6
8
10
12
Less than 2 2 to 5 Greater than 5
Gro
ss C
hu
rn %
(6
mo
nth
ave
rag
e)
LTV/CAC Ratio Segment
Gross churn by segment
N = 612 companies
What % of total sales is expansion revenue?
0
5
10
15
20
25
30
35
40
45
Less than 2 2 to 5 Greater than 5
% o
f re
ven
ue
that
’s u
pse
ll/ex
pan
sio
n
LTV/CAC Ratio Segment
% of Sales that are Expansion Revenue
N = 612 companies