This week’s SaaS roundup features tips for optimizing your SaaS pricing page, using analytics to build, test and grow a SaaS, rethinking customer churn rate and LTV/CAC and much more! Let’s get started…
Incredo‘s resident wordsmith Aida Grigoryan returns to the blog with some tips for optimizing your SaaS pricing page. Grigoryan points out a few alternatives to the standard SaaS pricing page before launching into a guided tour of everything pricing-related, concluding with 6 impressive examples of SaaS pricing pages to inspire you. If you’ve got SaaS pricing questions, Aida has the answers.
Imagine you sell the same product at $29 per month, then after a few months you raise the price to $39 and then charge $29 again. Nobody wants to be deceived and pay more than a product’s actual value is.– Aida Grigoryan
Medium writer Matt Pupa puts his analytics expertise to use in this 15-minute SaaS analytics deep-dive. No summary could do justice to this article as Pupa’s diligence leaves nearly no stone unturned in regards to the topic. Though told through the narrative built by his company’s own trials and tribulations, Pupa tells his story in a way that can benefit just about any SaaS founder. Initially aiming to show readers how to use analytics to build, test and grow a SaaS – this presentation does that and so much more. This lengthy read is worth every minute.
Analyzing customer cohorts for retention purposes has become very common in SaaS businesses. Many analytics platforms, like Google Analytics, have this type of view included in their offering. However, there was a time when this wasn’t as much as a focus for companies. Here’s the backstory on my experience building this cohort analysis…– Matt Pupa
Tech writer Daniil Khanin discusses what an MRR report is, why they exist, and how to get them right. MRR reports are especially helpful during confusing and complicated pay periods. For example, when a client pays a monthly subscription from January 20 to February 19, the company will receive a contribution from the service in both months, with the deposit in each month being calculated in proportion to the number of days in the month. At the same time, the client understands that they signed in January, and they will make the next payment in February. To account for such payments, the MRR report was invented, in which payments are normalized to the month of the commencement of the paid period.
To learn more about preparing your MRR reports right, give this article a 6-minute read!
The advantage of MRR is that such a report is normalized to the beginning of the month of each paid period, and thus in each month we see the amounts without jumps.– Daniil Khanin
Keeping with this week’s theme of somewhat-lengthy pieces, Loomly‘s Thibaud Clement shares his 13-minute take on SaaS metrics. Calling for a slight reassessment of how we approach these metrics in general, Clement focuses this week’s piece on churn rate and LTV/CAC. Pointing out that under certain circumstances, a higher growth rate will result in an apparently higher customer churn rate, he moves on to prove his thesis that SaaS businesses may be perfectly viable with a LTV/CAC ratio lower than 3 depending on your cost structure (and CAC Payback Period). The value is in the details with this article, and the “aha!” moments spread throughout are sure to leave you with something to take home.
Even without any Customer Success effort to prevent churn, churn seemingly “improves” over time. This is why the million-dollar question actually is: what happens when we start piling up cohorts on top of each others? More specifically: what happens when we start piling up bigger cohorts on top of each others?– Thibaud Clement
Clobloom‘s Emily Smith wants to help readers understand the SaaS customer lifecycle, and she has visuals and data to make it easy. Organized into three sections with nine bullets, Smith explains that by tracking key metrics at each stage, you can identify any weaknesses that are limiting your customer acquisition, engagement or retention, so that you can make improvements where it matters most. Simple as that? Well, maybe not entirely. But this article will get you started!
The customer lifecycle maps out how your customers engage with your company and your service. It’s important that you understand and monitor the customer lifecycle in its entirity: it can be very easy to get drawn in to focusing all your efforts in optimising one stage of the lifecycle, when doing so won’t help your customers achieve their desired outcomes more easily or quickly.– Emily Smith
The SaaS world can breathe a little sigh of relief this month as SaaS stocks continue to soar. Mere points off record highs, Crunchbase‘s Alex Wilhelm shows readers that things are looking quite promising as we head into the third quarter of 2019. Even if some players in the space have taken lumps in recent months, the fact remains that it’s a great time to be a SaaS company!
Since public SaaS shops are swimming in such warm waters, it’s hard to imagine that private SaaS companies won’t catch a ray of the same sun.– Alex Wilhelm
Last but not least comes a powerful entry from Seeking Alpha that has gathered quite a bit of buzz in the last week. The anonymous writer calls for the end of 2013’s “SaaS valuation bubble” theory popularized by Redpoint‘s Tomasz Tunguz, urging readers to separate the wheat from the chaff and accept that the premium of several of the businesses in 2019’s quality basket of 10 SaaS under $10 billion might be justified after all. Whether you agree or disagree, the writer backs up his points with some compelling data.
Six months after picking a quality basket of 10 SaaS under $10 billion, the strategy is delivering stellar results so far (+50%), almost tripling the returns of the S&P 500 over the first six months of 2019 (+17%). Is it too late to hop on the band-wagon? I don’t think so.– Seeking Alpha
Thanks so much for joining us for another SaaS roundup. We hope to see you here again next Monday!