FounderCEO

A BLOG ABOUT STARTUP STRATEGY & FINANCE

There are questions that every SaaS entrepreneur needs to answer for their sales process to build and scale up.

How to convert prospective customers into paying customers? How to convince them to register? How to convince them to use your products versus somebody else? There may be only few people coming to your website or many coming but not signing up.

You’d need to identify blockages in your customer acquisition funnel which may have a scaling issue or satisfaction problem. Usually, all sales...

All right! You just pitched your venture successfully and raised the capital you needed to start. For all you first time founders this is unchartered territory. It is easy to get lost in the excitement of kickstarting your business by starting to hire and  building/developing prototypes, but it is very crucial to start acting like a business. You need to begin developing metrics to measure the health of your firm. It is time to track your sales , consumer and financial metrics to help strategica...

Pricing is a matter of perception. Lets see how you can hack your way to higher conversion while also increasing the price.

1. Magic of 9

Marketers have used the magic of 9 for way too long. Look at the conversion rate of Gumroad. 

You’ll notice that prices ending in .99 have higher conversion rates than prices ending in one cent higher.

Today $5 has become the modern equivalent of 99 cents. The sites like Fiverr work on the same principle.

2. Reduce the left digit by 1

In the above chart, you’ll also...

Churn refers to the attrition rate of your customers. It basically means how many customers leave during a specific time period, which means how much revenue you lose. It is a critical KPI, right up there with the revenue.

During early stages of your startup, churn does not have a serious effect. 4% churn on a customer base of 100 means you are losing 4 customers every month. You can easily find 4 new customers to replace them. However, when you grow big and have, say a million customers, 4% chur...

SaaS is a whole different beast compare to the traditional businesses. Traditional metrics do not do justice and fail to capture the key data points that drive SaaS performance.

(Metrics presented below could be applied to any subscription based business.)

In SaaS and other recurring revenue businesses, the revenue is realized over an extended period of time. However, the investment for customer acquisition is upfront.

Let’s see what happens to negative cashflow when the business starts performing...

There is a growing acceptance of why recurring revenue is special. Founders now understand that not all revenue is created equal. The more predictable the revenue, the more valuable it becomes. In VC parlance, it is not a little bit better than non-recurring models, but 10x better. Many VC firms are adding weight to recurring models with high gross margins as evaluation criteria, along with market & team.

What makes this business model so valuable is that you can invest more of your time towards...

Please reload

Featured in Feedspot TOP 100 BLOGS for Startups

Sign Up

AND STAY UPDATED!

+91-734-9194-701

RECENT POSTS
Please reload

© 2020 by FounderCEO.io