SaaStr

SEPTEMBER 26, 2019

Housing prices apparently are falling in the Bay Area. What we learned from ’08-’09 in SaaS: First, SMB churn went through the roof — as SMBs went under much more quickly and often. As soon as the economy went south, SMBs started to simply go bankrupt and/or shut down. Slack is mortal.

SaaS Payments 277

SaaS Payments Sales Hiring Scale SMB 277

SaaStr

JUNE 29, 2022

It’s moved beyond its tiniest customers, of an ACV of < $1k, but other than that, it’s going upmarket without giving up its SMB roots. Even though Zendesk still has thousands and thousands of SMB customers. #2. Zendesk IPO’d as an SMB support solution. At $1B in ARR, Zendesk was growing 24%.

SMB 268

SMB Scale B2B Metrics 268

SaaStr

MAY 19, 2019

What lessons can we learn from this huge Kiwi SMB success, for other founders? ” So even in SMB sales in smaller markets, if you take dominant market share — you can get to $500m+ in ARR! ” So even in SMB sales in smaller markets, if you take dominant market share — you can get to $500m+ in ARR!

SMB 219

SMB Customer Lifetime Value AWS Churn 219

SaaStr

DECEMBER 26, 2020

Small customers churn at a much higher rate. The combination generally means net negative churn here is close to impossible for most vendors. The startups I’m involved with that have happy SMB customers have much higher brand awareness around $10m in general than those that don’t. ” Which is true.

SMB 350

SMB Sales Hiring Marketing Enterprise 350

SaaStr

NOVEMBER 9, 2019

Churn much past 3% a month IMHO is not really recurring revenue anymore. A lot of tools that sell to individuals and very small businesses do see churn around 7% a month though. You can survive in a very high churn VSB/SMB market, but your CAC has to be super low. You can always decrease churn a bit. Not really.

Scale 116

Scale Churn SMB Scaling 116

SaaStr

DECEMBER 27, 2020

Those of us who’ve been around a while think of New Relic as a freemium and almost SMB tool, but today 77% of their revenue comes from accounts greater than $100k. New Relic’s net negative churn / net dollar retention has dropped to 98% in the last quarter, despite a record 77% of revenue being from the enterprise.

Scale 304

Scale Outsourced Development SMB Cloud 304

Clouded Judgement

APRIL 11, 2024

The first few months of this year felt like a lot of churning in the market. This has all resulted in the median stock price declining 5% YTD. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. Is Software Rebounding?

Cloud 177

Cloud Software Azure AWS 177

Clouded Judgement

MARCH 22, 2024

At contract expiration these customers either renew (sign another contract with same annual value), expand (sign another contract with higher annual value), contract (sign another contract with lower annual value), or churn (stop being a customer and spend goes to zero). Buyers are also experimenting on vendors.

AI 183

AI Revenue Cloud Technical Advisors 183

SaaStr

DECEMBER 3, 2021

10 SaaStr 211: The Ultimate Guide To SaaS Pricing From Investors @ Benchmark, Matrix, Upfront Ventures & Operators @ Figma, Snyk, and Kustomer. #9 7 SaaStr 124: Upfront’s Mark Suster on The One Thing That Kills Sales, Why You Have To Price High and Discount & Why Sales People Are Either Farmers or Hunters. #6

Scale 205

Scale Sales Hiring SMB Benchmarks 205

SaaStr

JANUARY 24, 2024

How do you diagnose and solve churn? So, Dini came in, looked at the data around churn and usage, talked to customers, defined and narrowed Lattice’s core ICP, and made a few changes: They put a minimum in place not to sell to anyone under $4k. Can you start and stop a PLG motion? Often, they do.

Scale 231

Scale Sales Hiring Scaling Revenue 231

SaaStr

APRIL 4, 2023

This means you can raise prices, add modules, and expand, increasing the average revenue per customer account (ARPA). If churn doesn’t grow, your lifetime customer value is at its peak. They had SMB positioning with an unfavorable LTV to CAC ratio. Otherwise, things will slow down. What does that mean for your organization?

Scale 231

Scale Strategy Scaling Outbound Sales Team 231

SaaStr

APRIL 8, 2020

Click here for ChartMogul’s free-forever launch plan that will give SaaS businesses access to the world’s first subscription data platform so they can analyze and improve key metrics like MRR, churn and LTV. Profitwell’s Free Pricing and Retention Audits. Hiver’s Free Shared Inboxes for SMB.

Machine Learning 224

Machine Learning Artificial Intelligence SaaS Consulting 224

SaaStr

MAY 26, 2019

Price Increases Do Work at Scale. SurveyMonkey increased prices, which resulted in a big chunk of growth. At 16% growth, that’s about half of it from pricing increases. self-service customers, at some point, you can potentially have the entire world as customers and mature out in SMB. A few learnings: 1.

Scale 237

Scale SaaS Payments Payments Payment Services 237

SaaStr

DECEMBER 19, 2019

Many see this price point as not scaleable. But no big boost from net negative net churn. We might call them SMEs (vs SMBs). 140%+ for Slack, Zoom and Pagerduty’s SMB customers), they do have to work harder. But in the end, it is providing more products and more value at the same price point.

Outsourcing Services 325

Outsourcing Services Scale SMB Pricing 325

Baremetrics

JANUARY 24, 2021

Anyone managing a SaaS or subscription business is aware of customer churn. That means achieving any essence of “growth” requires replacing lost customers faster than the rate at which they churn. Managing churn is much like a constant game of plugging holes in a bucket so that you can eventually have a “rising tide” of water.

Churn 71

Churn SaaS Payments Payment Methods Payment Solutions 71

SaaStr

FEBRUARY 9, 2024

They had been building toward an SMB audience, so hiring 50 people in sales against a product that wasn’t ready for a specific audience would’ve been a mistake. The charter at Zapier is focused on product positioning (messaging and storytelling), merchandising their product (pricing and packaging), product launches, and GTM strategy.

Scale 265

Scale Sales Hiring Sales Marketing 265

SaaStr

NOVEMBER 22, 2020

Measure leading indicators and not lagging indicators like churn. SMB to Enterprise, decide which you want to start with and toward which you want to move. Product is the best way to differentiate your company and includes your product’s features, quality, reliability, price, and distribution. Market Fit.

Scale 311

Scale Scaling Technical Review Systems Review 311

Clouded Judgement

DECEMBER 21, 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 177

Cloud Software Benchmarks Retention 177

SaaStr

MAY 25, 2020

In your pricing. “Help people buy how they want to buy and be as transparent as you can with pricing ” – Ken Edwards, Sales leader, Uberflip. “Flat pricing for paid pilots” — CEO & Co-founder, ToneDen. Next up would be pricing and pricing plans structure. In your messaging.

Sales Hiring 338

Sales Hiring Sales Outsourced Development Technical Review 338

SaaStr

AUGUST 7, 2023

That works for a hyper-SMB model. The One Metric Only Founders Can Own — Customer Centricity Folks have been under pressure, and a lot of shenanigans and borderline unethical price increases and behaviors are happening. As we transition from the exuberance of 2021 into 2023, marketers have become super short-term focused.

Metrics 196

Metrics SaaS Sales Hiring Finance 196

Clouded Judgement

SEPTEMBER 12, 2023

Extra pressures around optimizations still exist, however gross churn levels have stabilized, and commentary on earnings calls suggest conversations around new bookings are starting to pick up. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

Cloud 169

Cloud Software Benchmarks Retention 169

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. Contracted expansion revenue i.e. add-ons or upgrades that affect the annual subscription price of the customer should be included. . Usage Fee-Based ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

SaaStr

FEBRUARY 18, 2021

Let’s do the math: Assume you can get $10/mo per paid user (a good basic price for Freemium for SMBs). Enough not to churn. In VSB or SMB business apps, you can get to one million paying customers — but you really, really need something broad-based to get there. To build a $100m business (i.e.,

Business Model 281

Business Model Scale Business PayPal 281

SaaStr

JANUARY 12, 2022

You just close more, and churn less, and upsell more, when you show up. Another top mistake SMB folks make trying to sell enterprise. 5M in ARR b/c we were too small a co and compliance dept blocked renewal (shoulda raised price I guess…) ” — Jared Hansen, CEO Thrilling Foods. ” — Vinish Garg.

CTO Hire 281

CTO Hire Sales Hiring New CTO CTO 281

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

Clouded Judgement

JUNE 20, 2023

The market is clearly pricing in lower rates + reacceleration of growth. It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn).

Cloud 161

Cloud Software Benchmarks Scale 161

ChurnZero

JUNE 2, 2021

Now we’re seeing numerous companies price 8 to 12, so it’s definitely jumped up a little bit. Price earnings doesn’t work. Is the bar across the same for a SMB-focused company versus an enterprise-focused company? There are investors that focus on SMB, and there are others that focus solely on enterprise.

Benchmarks 98

Benchmarks B2B SMB SaaS 98

SaaStr

OCTOBER 4, 2019

How does the product build in the early days differ when building for SMB vs enterprise? Why does Jeppe believe that building for SMB makes it easier to build a great culture internally? The mortality rate of SMBs is so high that you are going to always have high churn due to the customer segment? What changes? *

Scale 136

Scale SMB Technical Review Software Review 136

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

SaaStr

AUGUST 30, 2023

You can filter your search by industry, whether you’re SMB, mid-market, or Enterprise, etc. If that matches who you are as a customer and you fit that slice or segment of the market, that’s very valuable. Let’s look at an example. There are 332 e-signature listing software on G2. Zero cost of sale.

AI Search 201

AI Search AI ChatGPT Software Review 201

OPEXEngine

JUNE 11, 2020

Pros and Cons: SaaS SMB vs. Enterprise Models. SaaS companies selling in the SMB market are structured operationally very differently from SaaS companies selling in the enterprise market. It shows that you know your customers and can analyze which segments are likely to grow and which are at risk for churn.

SMB 59

SMB SaaS Benchmarks Subscription 59

User Pilot

JUNE 29, 2022

For instance, you can identify what customer segments churn right after signing up. Price is more suitable for mid-market and enterprise companies. Pricing: 14-day free trial with all features included. Pricing: Free trial available. Geared for SMB. See your customer churn rate. Pricing: Free plan.

SaaS Payments 94

SaaS Payments Software Review Payment Solutions Payment Methods 94

Point Nine Land

NOVEMBER 10, 2020

The simple LTV formula The simplest formula to calculate LTV in a subscription business is ( Customer Lifetime x Gross Profit) , where customer lifetime is ( 1 / Customer Churn Rate) and gross profit is ( Average Revenue per Account (ARPA) x Gross Margin). One of them relates to negative churn. Second, ping me if you’re pre-Series A.

Outsourced Development 97

Outsourced Development Customer Lifetime Value Churn Forecasting 97

FastSpring

SEPTEMBER 2, 2020

Lifetime Value (LTV) is a metric that shows the average revenue generated by a customer before they churn. In between Q1 of 2011 and Q2, HubSpot dropped their monthly churn rate by nearly 1%. They stick around for 3 months before churning. What Is LTV, and Why Is It Important? By the time Q2 of 2012 hit, it had dropped by 2%.

Scale 135

Scale Payment Methods Payments SaaS Payments 135

ChurnZero

MARCH 18, 2022

Q: Should you be worried if your annual logo churn is between 25% to 30%?*. But if it costs you 40 cents to get a customer, or something really low, and you get a lot of customers coming in, and you’re churning through most of them, you can probably get away with it. Then, you can stop counting them as churn.

Customer Success 98

Customer Success Metrics SaaS Banking 98

Sales Hacker

FEBRUARY 2, 2021

SMB Sales vs Enterprise Sales Process. Unlike the self sales model, where the volume of sales is somewhat higher, in the transactional sales model, sales volume is lower with a higher price point. Companies often use this model with specialized products with high price points and usually require more training and customer support.

Scale 95

Scale Enterprise Marketing Sales 95

Tom Tunguz

AUGUST 26, 2014

HubSpot’s target customer base are SMBs and with this price point, it’s possible to support a profitable inside sales model if the team is very efficient. HubSpot is the second fastest SMB SaaS company to IPO yet, achieving the mark within 8 years. Only WIX, CTCT and RNG had smaller figures of $86, $265 and $352.

Benchmarks 111

Benchmarks SMB Metrics SaaS 111