Seasonal SaaS: Your worst enemy?

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blog.chartmogul.comThe SaaS business model brings with it a wealth of benefits over traditional non-subscription based models. Everything suddenly becomes more measurable and predictable. Furthermore, your revenue recurs and compounds over time. What could be better?! However, subscription models aren’t a great fit for every product out there. There’s a common aspect of some products that can play havoc with metrics and growth: Seasonality.

What is seasonality in SaaS?

Simply put, seasonality is when a customer’s need for your solution is not continuous. On a higher level, it’s all about how revenue flows into your business across a timeframe. The best way to detect it is to look at two metrics: Reactivation MRR and Churned MRR. In a seasonal business, both of these metrics will assume a high proportion of your total MRR for at least part of the year.

 

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photo CC by Dafne Cholet

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