Here are 10 things you should do if you want your SaaS business to fail.
Having worked in several early stage startups and now (at RevFixr) working with dozens of founders and institutional investors on monetisation, I’ve witnessed my fair share of mistakes.
There is no one perfect way to package and price your software, but there sure are guaranteed ways to run your business into the ground.
If you want your SaaS business to fail, definitely adopt these 10 monetisation policies:
1️⃣ Never update your pricing except for inflation-indexing.
↳ Your team will have zero incentive to improve the product for existing users.
2️⃣ Achieve 0% customer churn.
↳ Zero churn is a great indicator you are leaving money on the table.
3️⃣ Implement good-better-best pricing tiers.
↳ Packaging your software based on the number of features instead of the jobs-to-be-done of your customer is a good way to prevent account expansion.
4️⃣ Build first, package later.
↳ Building out your product without any willingness-to-pay research or idea how it’ll impact your packaging is essentially gambling. Well.. with especially terrible odds.
5️⃣ Price based on features.
↳ Your B2B buyers will have a hard time creating an internal business case and unlock budget for features.
6️⃣ Don’t tie your pricing directly to your value creation.
↳ If you tie your pricing to the value you create, you risk that your average contract value will grow overtime.
7️⃣ Package for the masses.
↳ Creating packaging to cater everyone is an effective way to cater no one.
8️⃣ Don’t run experiments with different pricing models.
↳ If you pick the wrong pricing model (e.g. seat, usage, fixed fee, etc.) you get to invoice 20-60% less revenue per customer.
9️⃣ Don’t build your commercial organisation around the annual contract value.
↳ Senior sales reps can close plenty of $100 contracts, whether it’s cost-effective is another matter.
🔟 Use discounts to close any deal.
↳ Discounting too often is a great way to communicate your product is not worth its price tag.
Adopt a few of these and you might leave some money on the table. Adopt all of them and your competitors will send thank-you notes.
Tjitte Joosten is the Founder of RevFixr, the one-stop shop for better monetisation of your customer base. RevFixr turns pricing into your biggest growth lever. Prior to founding RevFixr, Tjitte was responsible for the commercial strategy and operations at tech companies like Docfield and Experfy.
