Clouded Judgement

SEPTEMBER 12, 2023

For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com). To calculate implied ARR I take the subscription revenue in a quarter and multiply it by 4.

Cloud 169

Cloud Software Benchmarks Retention 169

SaaStr

NOVEMBER 2, 2019

How does Krish think about purely serving the SMB market? How does he think about the mortality rate of SMBs? How does Krish think your customer acquisition and GTM strategy has to change with the movement from SMB to enterprise? Billion story from its launch in 2008 to its 2018 acquisition by Recruit Holdings.

Scale 127

Scale SaaS Payments Sales Recruiting Payment Services 127

Clouded Judgement

APRIL 12, 2023

This matters a lot more when stock prices are going down, and management teams often grant additional shares to make employees whole (thus increasing dilution even more) Net Revenue Retention High net revenue retention is the fourth aspect of a successful quarter, and one of my favorite metrics to evaluate in private SaaS companies.

Cloud 161

Cloud Software Benchmarks Retention 161

OPEXEngine

MAY 18, 2021

SaaS metrics are viewed differently at different stages of growth and for different sales models, primarily whether a company is selling into an SMB or enterprise marketplace. ARR is an essential subscription metric that identifies the recurring revenue expected on an annual basis from the subscriber base. Usage Fee-Based ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

Clouded Judgement

JUNE 20, 2023

The market is clearly pricing in lower rates + reacceleration of growth. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 161

Cloud Software Benchmarks Scale 161

SaaStr

JANUARY 24, 2024

Scaling Enterprise vs. Mid-Market Sales: Key Takeaways from Calendly It’s a common blueprint to start with SMB and mid-market accounts as your ideal customers. As a subscription business, you should always be growing, but the rate of growth wasn’t where they wanted it to be. The result?

Scale 220

Scale Sales Hiring Scaling Revenue 220

Clouded Judgement

DECEMBER 20, 2022

This matters a lot more when stock prices are going down, and management teams often grant additional shares to make employees whole (thus increasing dilution even more) Net Revenue Retention High net revenue retention is the fourth aspect of a successful quarter, and one of my favorite metrics to evaluate in private SaaS companies.

Cloud 130

Cloud Software Review Software Benchmarks 130

FastSpring

SEPTEMBER 2, 2020

Depending on what calculation you use, LTV can paint an honest picture of whether your customers are spending and staying long enough to cover acquisition costs and hopefully—make you a profit. Tracking your LTV/CAC ratio allows you to spend the right amount on customer acquisition while still making a profit.

Scale 146

Scale Payment Methods Payments SaaS Payments 146

OPEXEngine

NOVEMBER 17, 2020

Customer Acquisition Cost (CAC). Especially now, since the onset of the pandemic, most companies have shifted some acquisition resources to customer retention—especially in 2020, look at what was spent on acquiring new customers and back-out anything that doesn’t apply. Take CAC, for example.

Systems Review 52

Systems Review Technical Review Payment Features Scale 52

OPEXEngine

FEBRUARY 22, 2022

SMB customers will want high-touch sales engagement and service delivery but SMM SaaS companies will likely not have the budget necessary to justify providing this level of sales support. The other option is to outperform lower-cost competitors by gaining market share, usually by lowering their price point to achieve virality.

SaaS Payments 52

SaaS Payments Payment Services Payment Methods Marketplace as a Service 52

SaaStr

MARCH 20, 2020

318: The first step in success with SMB clients is to recognize that it’s not a one size fits all scenario. Companies need a specialized approach for SMB accounts, different than the tactics used for Enterprise. I look at the growth of our organic acquisitions. This episode is sponsored by TaxJar.

SMB 179

SMB Scale Startup Marketplace as a Service 179

Sales Hacker

APRIL 10, 2018

The SMB segment—going upstream vs. downstream. Pro-user, SMB, Enterprise, this requires a specific Go To Market strategy. When we map the number of deals committed against a listed price (ACV), you will notice deals starting to segment around discount levels. The SMB Segment: Going Upstream vs. Downstream.

SMB 73

SMB Strategy Outsourced Development Marketing 73

ChurnZero

MARCH 18, 2022

Yours is, you have a super low Customer Acquisition Cost (CAC) so you can justify that with the super high churn. If you tell me that we have this awesome land-and-expand model, we go in with a really low price, and then we have a dedicated expansion team that does these upsells, and I say, “Wow, what an amazing story.

Customer Success 98

Customer Success Metrics SaaS Banking 98

Baremetrics

JANUARY 24, 2021

Anyone managing a SaaS or subscription business is aware of customer churn. This is when the good stuff starts to happen within a subscription business In this post I’m going to share the strategy and steps we followed to reduce our monthly customer churn by over 70%, and explain how we positioned Nudge Coach for efficient, long-term growth.

Churn 71

Churn SaaS Payments Payment Methods Payment Solutions 71

Casey Accidental

NOVEMBER 13, 2019

If driving more customers was your customers’ #1 need, and that’s not what you helped them with, you probably didn’t build a very successful business, or the problem of solving customer acquisition for that market is very difficult. Customer acquisition was always a key value proposition, and they delivered on it.

Marketplace as a Service 106

Marketplace as a Service Business Model Business Underperforming Technical Team 106

CustomerSuccessBox

FEBRUARY 28, 2022

You mostly need repeat purchases to get payments with a subscription model and it is easier to impress existing customers than starting all over to acquire new ones. Best practices: Consumption vs subscription. Meaning they have a good customer retention rate who are paying for subscriptions, have upsells and expansions as well.

Retention 52

Retention SaaS Payments Payments Payment Methods 52

SaaStr

OCTOBER 29, 2019

We’re going to talk about matching price to value, and I’m going to share some lessons from my time as both an operator and an investor. This is a mobile solution for SMB’s to send an invoice and get paid. This is an interesting study that was done by the folks from Price Intelligently. Hi, everybody.

Payments 100

Payments Pricing Compensation SaaS Payments 100

SaaStr

AUGUST 9, 2019

How does Vikas see the space play out in the coming years when it comes to acquisitions? You’ve seen SalesForce with a number of significant acquisitions in the last 12 months, as an example. It’s not an SMB where you’re getting volumes of 100 a day. Does this not lead to a consolidatory environment?

SaaS Payments 132

SaaS Payments Cloud Technical Review Scale 132

Intercom, Inc.

JULY 29, 2021

SaaS is the subscription business. We look at our acquisition rates. We have SMB mid-market enterprise. We know our customers and what the market price is. SaaS is the subscription business. And I think you need to think about people management the same way. We look at our retention rates. Mark: It’s funny.

Sales Hiring 223

Sales Hiring Scale Sales Recruiting Underperforming Technical Team 223

Brian Balfour

JULY 18, 2017

subscription e-commerce) typically live here. The higher the price, the greater the friction. You can have a business here, but your acquisition strategy ends up a patchwork of bits and pieces from a lot of different channels rather than owning one channel. One step over on the spectrum you have slightly higher ARPU businesses.

Growth Hacking 65

Growth Hacking B2B B2C SMB 65

ChurnZero

JANUARY 4, 2019

“In 2019 there will be an increase in subscription fatigue. When even your electric toothbrush is pushing you towards a subscription model, we can expect to see an increase in subscription fatigue. If we’re not at peak SaaS, we’re probably close to it. ” – Nick Vibert, Customer Success Officer, SmartrMail.

Customer Success 73

Customer Success SaaS Payments Payment Services Payment Solutions 73

ChurnZero

AUGUST 24, 2018

Because you certainly are going to want to make sure that your subscription product is priced so your customers can adopt to it. The big thing that you probably want to focus on is that recurring revenue stream. Also, are you going to continue to sell perpetual? If so, you are going to have to do some math there.

Finance 61

Finance Customer Success Scale Customer Lifetime Value 61

ChurnZero

JANUARY 4, 2019

“In 2019 there will be an increase in subscription fatigue. When even your electric toothbrush is pushing you towards a subscription model, we can expect to see an increase in subscription fatigue. If we’re not at peak SaaS, we’re probably close to it. ” – Nick Vibert, Customer Success Officer, SmartrMail.

Customer Success 49

Customer Success SaaS Payments Payment Services Payment Solutions 49

Point Nine Land

JUNE 18, 2023

Both can be used to report on customers, subscriptions, and revenue. 3) How much can I spend on customer acquisition? Cohort analysis is the best way to forecast customer lifetime and get a solid estimate of LTV and CAC payback times — obviously extremely important so you know how much you can spend on customer acquisition.

SaaS Payments 128

SaaS Payments Payment Services Payments SaaS 128

SaaStr

JUNE 1, 2021

I’m going to skip by my life story, and how I grew up as a small child in India, and how the dusty streets influenced my take on unit economics, and SaaS subscription models. Do not…,” and the reason is no one hardly ever has succeeded in building a big business in SMB. ” “Yep, we need a price.”

Part-Time VPE 214

Part-Time VPE Technical Cofounder CTO Hire New CTO 214

SaaStr

DECEMBER 14, 2020

Folks churn out of their Verizon plan, their Netflix subscription, etc. In a low-end subscription model for a tool, not a solution (e.g., Churn is a good term for your SMB and freemium customers. semi-commodity storage, semi-commodity hosting, etc. the dynamics are similar. Like Verizon. 120%+ for your Larger Customers.

Churn 362

Churn Sales Hiring Systems Review B2C 362

SaaStr

JUNE 7, 2019

What does Amit think about the differing variable price mechanisms that one can choose? How does one have a variable pricing mechanism without disincentivizing users to use the product? How do you know when you have the right pricing mechanism in place from the sales cycles of the reps? Should they leave money on the table?

Outsourced Development 132

Outsourced Development Outsourcing Services Sales Hiring Scale 132

Unbounce

JUNE 16, 2020

I think channel distribution is one of the most promising and untapped acquisition channels for SaaS?—?especially especially for SMB SaaS startups. Over the long term, it can also deliver increased revenue, higher customer lifetime value (LTV), and reduced customer acquisition costs (CAC). Already pretty valuable, right?).

Outsourcing Services 131

Outsourcing Services Sales Recruiting Scale SaaS 131

ProfitWell

SEPTEMBER 3, 2019

“Close enough” is sufficient only in horseshoes and hand grenades; your pricing page is no exception. If your pricing page isn't perfectly designed to convert potential customers, all that effort you put into sales, marketing, and product development might as well be for naught. What is a pricing page?

Pricing 69

Pricing Scale Technical Review compliance 69

Chart Mogul

OCTOBER 9, 2020

Yet assessing this pricing model's success can be challenging if you're not measuring its long term, compounding effect on revenue. By removing entry-level cost barriers to product adoption, companies using a Freemium strategy are able to increase their total addressable market to include price-sensitive audiences, startups, and SMBs.

Scale 83

Scale Churn Metrics Retention 83

Payrix

MARCH 12, 2024

Andy also reflects on the complexities of addressing unintegrated customers, urging SaaS companies to prioritize consolidation and user experience enhancements over price. The mistake I find a lot of folks making is trying to compete on price. Let me see if I can lower your price.’ Let me see if I can lower your price.

Payments 100

Payments Embedded Payments Merchant Services SaaS Payments 100

SaaStr

AUGUST 19, 2022

When do you recommend to diversify the distribution channels or the customer acquisition channels for a SaaS? I talked to another and it says, “Look, you’ve done some sales at the SMB and up side, so bring in a sales lead.” People talk about the deal, they talk about the price and all this stuff.

Scale 205

Scale Sales Hiring Scaling VP of Engineering 205

Chart Mogul

OCTOBER 9, 2020

Yet assessing this pricing model's success can be challenging if you're not measuring its long-term, compounding effect on revenue. By removing entry-level cost barriers to product adoption, companies using a Freemium strategy are able to increase their total addressable market to include price-sensitive audiences, startups, and SMBs.

Scale 52

Scale Churn Metrics Retention 52

SaaStr

NOVEMBER 1, 2019

About the episode: Tien Tzuo is the Founder and CEO of Zuora, one of the fastest-growing SaaS companies that has been at the forefront of the rise of subscription business models. Before joining Upfront Mark was Vice President, Product Management at Salesforce.com following its acquisition of Koral, where Mark was Founder and CEO.

Technical Review 143

Technical Review Development Team Review Scale Software Review 143

Baremetrics

NOVEMBER 9, 2021

The ideal buyer for lower-priced businesses might be a solopreneur looking for a hands-off stream of income. Low churn allows recurring revenue to grow, improves growth rate, and reduces the risk of long-term value loss. SMB SaaS companies tend to have higher churn rates due to their lower demand and less sophisticated needs.

SaaS Payments 105

SaaS Payments Technical Review Development Team Review Software Review 105

Chart Mogul

FEBRUARY 19, 2021

But at the same time, retention is also the most crucial factor that drives acquisition and monetization. It is a question of strategic importance for SaaS companies because of how the subscription model works. You can have the best acquisition engine in the world, but it can’t save you if your retention is not up to par.

Retention 72

Retention Churn Benchmarks SMB 72

Intercom, Inc.

OCTOBER 29, 2019

Segmentation cannot incorporate all strategic considerations nor changes to product, pricing, and packaging over time. You can’t find email lists using Job-to-be-Done, but you can find ones for B2C subscription businesses that have a high volume of website traffic. A substitute for strategy or planning.

Business 184

Business B2C Scale Headcount 184