How a Price Change Can Impact Your SaaS Metrics: Example in Action

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labs.openviewpartners.comIn an earlier post, “Predicting the Impact of SaaS Pricing Changes,” we looked at how price changes can impact SaaS metrics and what questions you should ask before making a price change.

Let’s look at what happened at some real companies when they made price changes.

The critical metrics we are concerned with are Customer Acquisition Costs (CAC), Customer Lifetime Value (LTV) and Monthly Recurring Revenue (MRR) — the classic SaaS metrics (to refresh your memory see David Skok SaaS Metrics 2.0). Are these the only metrics you need to be concerned about as you manage your business? Of course not. You also worry about cash flow, growth momentum, user engagement, and how much value you are actually creating for your customers. But unit economics (CAC & LTV) are a good way to see if your business makes sense and just how well it will scale.

Read more at labs.openviewpartners.com

 

photo CC by Images Money

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