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A corollary is that your SaaS product needs to be priced in a way that enables sales (typically >$5K ACV).
by il 12y ago
A corollary is that your SaaS product needs to be priced in a way that enables sales (typically >$5K ACV).
- kareemm 12y agoThis is a non-obvious point that took me a long time to grok: the way you sell your product is a function of its price, not the other way around. The more you charge, the more high-touch you can get when selling (i.e. with an outside sales force).
- jfabre 12y agoCould you be more explicit please? I have no idea what's ACV.
- chiph 12y agoAnnual Contract Value. The lower your price, the more your product and sales process needs to be self-service, because you can't afford to send a salesperson out for a $1000/yr contract (airfare + hotel + rental car + their time, annnd you're over any possible return, even before including R&D and support costs)
- jxm262 12y agoI believe he means annual contract value. http://saasaddict.walkme.com/getting-your-saas-acv-annual-contract-value-right/ http://saasaddict.walkme.com/getting-your-saas-acv-annual-co... http://www.forentrepreneurs.com/saas-metrics-2-definitions/ http://www.forentrepreneurs.com/saas-metrics-2-definitions/
- efriese 12y agoNot only to enable sales, but to also show the business problem you are fixing is important. I've been in enterprise deals where if the price tag is too low, the executive doesn't think it's important enough for him/her to fix. It can sound crazy, but once you've tried to fix big problems at that level it makes some sense.
- orky56 12y agoWith SaaS, LTV is a more important metric than ACV since you need to take into account average retention, up/cross-selling opportunities, and more. If you take into account CAC even better. Armando Mann over at RelateIQ uses Cohort Growth to measure LTV for each customer within a cohort to ensure the business is growing taking into account the bottom line.