June 22 & 23, 2016 at http://tractionconf.io.

1. Lessons from seeing inside 2k SaaS Companies
TractionConf 2016
@PriceIntel

2. Acquisition will diminish as the
main source of growth.
@PriceIntel

3. Who the hell are you?
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4. Happy customers big and small
ProfitWell
SaaS pricing software
and tech enabled
services
Free financial metrics
for subscription
businesses

5. We’ve seen inside more subscription businesses
than anyone else on the planet.
@PriceIntel

6. We’re obsessed with acquisition.
Like stalked level obsessed.
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7. Looked at 25,679 blog posts.
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8. We love talking about acquisition
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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

9. Looked at 8,324 B2B SaaS companies
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10. We love building for acquisition
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0%
25%
50%
75%
100%
Acquisition Monetization Retention
%oftotalcompanies
Category of B2B SaaS companies
N = 8,324 companies currently active

11. These are just the acquisition companies
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12. Asked SaaS Founders/Executives
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13. What’s most important?
@PriceIntel
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

14. What’s most important?
@PriceIntel
N = 1,432 SaaS companies
0%
25%
50%
75%
100%
Acquisition Monetization Retention
%oftotalcompanies
C-Level/Founder Spend Their Time

15. We think acquisition is our oxygen.
@PriceIntel

16. We think acquisition is our oxygen.
In reality…acquisition is our crack.
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17. Why is acquisition diminishing as the
main source of growth?
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18. Our world is more competitive, making
switching costs easier.
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19. 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
#ofCompetitors
How many competitors did you have during the following periods?

20. The relative value of features is declining,
making a race to the bottom for feature based
pricing.
@PriceIntel

21. “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
WTPas%ofWTP4YearsAgo
Willingnessto pay over time relative to WTP 4 years ago
Core Features Single Sign On Integrations Analytics

22. If we improve each lever by the same
amount, which lever causes the most growth?
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23. Impact of improving each
growth lever
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3.32%
0%
5%
10%
15%
Acquisition Monetization Retention
%impactonthebottomline
Impact of improvingeach lever by 1%
N = Data from 512 companies

24. Impact of improving each
growth lever
@PriceIntel
3.32%
6.71%
0%
5%
10%
15%
Acquisition Monetization Retention
%impactonthebottomline
Impact of improvingeach lever by 1%
N = Data from 512 companies

25. Impact of improving each
growth lever
@PriceIntel
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

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

27. What we find important
@PriceIntel
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

28. What works for growth
@PriceIntel
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

29. We’re ill equipped for this transition
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30. We don’t really know our buyers
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31. 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

32. We don’t know our buyers that well
@PriceIntel
0%
25%
50%
75%
100%
Thought about them Central document Quantified buyer
personas
%ofRespondents
Which single category best describes your buyer personas?
N = 1,432 SaaS companies

33. 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+
%ofRespondents
#
of
cust dev conversations
How many cust dev conversations are you having per month?
N = 1,432 SaaS companies

34. We don’t send any cust dev surveys
@PriceIntel
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 = 1,432 SaaS companies

35. We aren’t truly testing that much
@PriceIntel
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 = 1,432 SaaS companies

36. This should be scary.
@PriceIntel

37. 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

38. Everything aligns to the customer
Point of Conversion
Drive Customer #1
Justify price #1
Justify price #2
Drive Customer #2
Drive Customer #3
Justify price #3

39. How do we fix this?
@PriceIntel

40. Path for a recovering acquisition addict
• Quantify you buyer personas
• Implement a customer development process
• Go beyond feature based differentiation

41. Quantify your buyer personas
@PriceIntel

42. 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

43. Go to the customer!
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44. For the love of God. Talk to your customer.
@PriceIntel

45. Implement a customer development process
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46. Understanding your customer
Customer/Market
Research
Communication
Plan
Week:
1 2 3 4 5 6 7 8 9
Impact
Analysis
Customer
Advisory
Panel
Implement
Changes
Step:

47. Move beyond feature based differentiation
@PriceIntel

48. What will drive retention and better
monetization?
• UX
• Service/Just do it for me
• Value metric based pricing

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

50. http://priceintelligently.com/TractionConf
Patrick@priceintelligently.com
@PriceIntel

51. Appendix
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52. Some benchmarks to guide you.
@PriceIntel

53. What should gross churn look like?
N = 612 companies
“5%”

54. What should gross churn look like?
0
2
4
6
8
10
12
Less than 2 2 to 5 Greater than 5
GrossChurn%(6monthaverage)
LTV/CAC Ratio Segment
Gross churn by segment
N = 612 companies

55. What % of total sales is expansion revenue?
N = 612 companies
“10-15%”

56. 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
%ofrevenuethat’supsell/expansion
LTV/CAC Ratio Segment
% of Sales that are Expansion Revenue
N = 612 companies

57. How much should you be growing YoY?
N = 612 companies
“As much as possible”

58. How much should you be growing YoY?
0
20
40
60
80
100
120
140
160
180
200
Less than $100k $101k to $500k $501k to $1M $1M to $5M $5.01M+
%GrowthRateYoY
Size of Company (ARR)
Growth rate as a function of size
N = 612 companies