Lessons from the Revenue Growth of 2k SaaS Companies by Patrick Campbell, CEO, Price Intelligently
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Transcript of Lessons from the Revenue Growth of 2k SaaS Companies by Patrick Campbell, CEO, Price Intelligently
Happy customers big and small
ProfitWellSaaS pricing software
and tech enabled services
Free financial metrics for subscription
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