1.
Lessons learned from 3k SaaS companies
SaaStock 2016
@PriceIntel

2.
We live in a world where acquisition
as we know it is dead
@PriceIntel

3.
@PriceIntel
Single
feature
SaaS
WE’RE LIVING IN A DIFFERENT PRODUCT ERA

4.
@PriceIntel
Single
feature
SaaS
Multi
feature
SaaS
WE’RE LIVING IN A DIFFERENT PRODUCT ERA

5.
@PriceIntel
Single
feature
SaaS
Multi
feature
SaaS
Automation
WE’RE LIVING IN A DIFFERENT PRODUCT ERA

6.
@PriceIntel
Single
feature
SaaS
Multi
feature
SaaS
Automation Consolidation
WE’RE LIVING IN A DIFFERENT PRODUCT ERA

7.
@PriceIntel
Single
feature
SaaS
Multi
feature
SaaS
Automation Consolidation
Workflow &
Anti-Active
Usage
Products
WE’RE LIVING IN A DIFFERENT PRODUCT ERA

8.
Our world is now pin pointed on
customer value for growth.
@PriceIntel

9.
Who are you?
@PriceIntel

10.
Happy customers big and small
ProfitWell
SaaS pricing software
and tech enabled
services
Free financial metrics
for subscription
businesses
@PriceIntel

11.
We’ve seen inside more SaaS companies than
anyone else on the planet.
@PriceIntel

12.
The market is becoming saturated and unit
economics just aren’t what they used to be…
@PriceIntel

13.
Our world is more competitive, making
switching costs easier.
@PriceIntel

14.
Competition is growing
N = 289 SaaS companies, +/- 3.44% MoE at 95% level
0
2
4
6
8
10
12
5 Years Ago 3 Years Ago 1 Year Ago Today
#ofCompetitors How many competitors did you have during the following periods?
@PriceIntel

15.
Competition is here
0%
10%
20%
30%
40%
50%
0 to 2 3 to 5 6 to 10 11+
%ofRespondents
How many competitors do you current have?
(Companies around for less than 1 year)
N = 547 software companies
@PriceIntel

16.
The relative value of features is declining.
All software is going to $0.
@PriceIntel

17.
“Differentiation” isn’t what is used to be…
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
WTPas%ofWTP4YearsAgo
Willingnessto pay over time relative to WTP 4 years ago
Core Features Single Sign On Integrations Analytics
@PriceIntel

18.
CAC is increasing over time.
@PriceIntel

19.
Acquiring a customer is getting pricier
N = Varies by line, but minimum of 453 companies per data point
-­‐25%
0%
25%
50%
75%
4 Years Ago 3 Years Ago 2 Years Ago 1 Year Ago Today
CACas%ofCAC4YearsAgo
Blended CAC relative to four years ago
B2B B2C
@PriceIntel

20.
We make matters worse by focusing on the
wrong fundamentals
@PriceIntel

21.
We’re obsessed with acquisition.
Like stalker level obsessed.
@PriceIntel

22.
Looked at 25,679 blog posts.
@PriceIntel

23.
We love talking about acquisition
0%
25%
50%
75%
100%
Acquisition Monetization Retention
%oftotalarticles
Category of growth articles written from 2014 to 2106
N = 25,679 blog posts written between 2014 to 2016
@PriceIntel

24.
Looked at 6,324 B2B companies
@PriceIntel

25.
We love building for acquisition
0%
25%
50%
75%
100%
Acquisition Monetization Retention
%oftotalcompanies
Category of B2B SaaS companies
N = 6,324 companies currently active
@PriceIntel

26.
Asked SaaS Founders/Executives
@PriceIntel

27.
What’s most important?
0%
25%
50%
75%
100%
More logos Making more money per
customer
Keeping customers around
longer
%oftotalcompanies
C-Level/Founder Growth Preferences
N = 1,432 SaaS companies, +/- 2.19% MoE at 95% level
@PriceIntel

28.
What’s most important?
N = 1,218 SaaS companies, +/- 2.61% MoE at 95% level
0%
25%
50%
75%
100%
Acquisition Monetization Retention
%oftotalcompanies
C-Level/Founder Spend Their Time
@PriceIntel

29.
There are clear winners and losers in this
environment.
@PriceIntel

30.
SaaS Death correlates to acquisition focused teams
0%
25%
50%
75%
100%
Less than $2.5M ARR $2.51M to $5M ARR $5.01M+ ARR
%ofRespondents
Of those companies who died, what was the makeup of their growth
Primarily
Acquisition
Growth Balanced
Growth
N = Minimum of 30 companies per category who died over the past 4 years
@PriceIntel

31.
Balanced growth velocity is much larger
0%
25%
50%
2012 2013 2014 2015
%ofRespondents
How do growth rates compare to our two growth groups?
Primarily Acquisition Growth Balanced Growth
N = Minimum of 512 companies per segment pulled from the middle 2/3 of companies in terms of growth rate. This, along with a
dampening model was used to control for outlier spikes in growth rate.
@PriceIntel

32.
Our focus will kill us.
@PriceIntel

33.
The root cause here stems from a lack of
buyer centricity.
@PriceIntel

34.
We don’t really know our buyers
@PriceIntel

35.
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

36.
We don’t know our buyers that well
0%
25%
50%
75%
100%
Thought about them Central document Quantified buyer personas
%ofRespondents
Which single category best describes your buyer personas?
N = 1,647 SaaS companies
@PriceIntel

37.
We don’t do a lot of cust dev conversations
0%
25%
50%
75%
100%
Less than 10 11 to 25 26 to 50 51+
%ofRespondents
#
of
cust dev conversations
How many cust dev conversations are you having per month?
N = 1,647 SaaS companies
@PriceIntel

38.
We don’t send any cust dev surveys
0%
25%
50%
75%
100%
0 1 2 3+
%ofRespondents
#
of
cust dev surveys
How many cust dev surveys are you sending each month?
N = 1,647 SaaS companies
@PriceIntel

39.
We aren’t truly testing that much
0%
25%
50%
75%
100%
0 1 to 3 4 to 10 11+
%ofRespondents
#
of
tests/experiments
How many tests or experiments are you running each month?
N = 1,647 SaaS companies
@PriceIntel

40.
We don’t realize the power of balanced growth.
@PriceIntel

41.
If we improve each lever by the same
amount, which lever causes the most growth?
@PriceIntel

42.
Impact of improving each
growth lever
3.32%
0%
5%
10%
15%
Acquisition Monetization Retention
%impactonthebottomline
Impact of improvingeach lever by 1%
N = 578 SaaS companies, +/- 2.89% MoE at 95% level
@PriceIntel

43.
Impact of improving each
growth lever
3.32%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
%impactonthebottomline
Impact of improvingeach lever by 1%
N = 578 SaaS companies, +/- 2.89% MoE at 95% level
@PriceIntel

44.
Impact of improving each
growth lever
3.32%
12.70%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
%impactonthebottomline
Impact of improvingeach lever by 1%
N = 578 SaaS companies, +/- 2.89% MoE at 95% level
@PriceIntel

45.
Improving retention and monetization has 2-
4x the impact of focusing on acquisition.
@PriceIntel

46.
What we find important
0%
25%
50%
75%
100%
More logos Making more money per
customer
Keeping customers around
longer
%oftotalcompanies
C-Level/Founder Growth Preferences
N = 1,432 SaaS companies
@PriceIntel

47.
What works for growth
3.32%
12.70%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
%impactonthebottomline
Impact of improvingeach lever by 1%
N = Data from 512 companies
@PriceIntel

48.
This should be scary.
@PriceIntel

49.
Everything aligns to the customer
Point of Conversion
Drive Customer #1
Offer Product #1
Offer Product #2
Drive Customer #2
Drive Customer #3
Offer Product #3
Justify price #1
Justify price #2
Justify price #3
@PriceIntel

50.
How do we fix this?
@PriceIntel

51.
Three ways to overcoming acquisition addiction
• Know your numbers
• Quantify your buyer personas
• Implement a customer development process
@PriceIntel

52.
Know your numbers.
@PriceIntel

53.
Know your numbers
ProfitWell.com

54.
Quantify your buyer personas
@PriceIntel

55.
Persona-Product 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

56.
Go to the customer!
@PriceIntel

57.
What do your customers
value the most?
Needed: Relative Preference Analysis
@PriceIntel

58.
How much are your
customers willing to pay?
Needed: Price Sensitivity Analysis
@PriceIntel

59.
For the love of God. Talk to your customer.
@PriceIntel

60.
If you don’t know who you’re driving to your
product, how do you know what build or how
to price?
@PriceIntel

61.
Implement a customer development process
@PriceIntel

62.
Your Cust Dev Process
Customer/Market
Research
Communication
Plan
Week:
1 2 3 4 5 6 7 8 9
Impact
Analysis
Customer
Advisory
Panel
Implement
Changes
Step:
@PriceIntel

63.
Your Pricing Committee
Main Decision Maker
(could be a member of the committee, as well)
Main Coordinator Typically in Product or Marketing
Product Leadership Corp Dev/Finance
Sales Leadership Marketing Leadership
@PriceIntel

64.
We’re in a customer value centric world.
@PriceIntel

65.
You will be left behind if you think you can
brute force your growth.
@PriceIntel

66.
Thankfully, there’s a community around you
to help you grow, but you need to take the
first step.
@PriceIntel

67.
Here’s how we’re going to help today
• SaaS Pricing Workshop – 1:30pm
– Pricing workshop, where we’ll walk through the steps to quantify
your personas and answer every pricing question you’ve ever had
• SaaS Benchmarking Data Dump – 4pm
– We have the world’s largest SaaS dataset, and we’ll be walking
through some key benchmarks and differences between
companies doing well and those in trouble
@PriceIntel

68.
Patrick@priceintelligently.com
@PriceIntel