Kennedy: ProcurementExpress reaches $2M ARR with 25 employees
James Kennedy · Episode 646 | Building a Recurring, Annual Price Increase Into Yo... · Jan 31, 2023 · at 4:45
James Kennedy, founder of ProcurementExpress, discusses his company's growth, team size, and funding background with Rob Walling.
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“Yeah, we did take an angel round actually, so we have like a five angel investors, yeah, in 2016, and but we have about 25 people, and we're in and around a two million ARR in revenue mark”
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More from James Kennedy
Kennedy: Software's exact dollar price rarely affects mid-market purchasing decisions
“I'm firmly convinced that the actual dollar value has very little to do with the buying decision, definitely in mid-market.”
ProcurementExpress institutes automatic 5% to 10% price increases every September
“New customers to come on September, we do our price increase. We normally say exactly that. It's like between five and 10%. Last year it was eight percent.”
Kennedy: SaaS customers tolerate price increases under 20% if deriving value
“The second thing is that I think really, you know, it's a rule of thumb that no one really cares as long as less than 20%, except for one group of people, and that's the group of people that weren't getting value from your product in the first place.”
Kennedy: 5% to 15% of paying SaaS customers are inactive
“So especially, I think it's a, maybe a little secret of SaaS is that there's, you know, inactive users. It can be anything from five to 15% of your Customer base may be paying you and are not getting value from the product.”
Kennedy: Price increase churn strictly comes from customers who never onboarded
“We do have a bump in churn after we do this, for sure. It does exist, but it's always the people who were just never onboarded in the first place.”
Kennedy: Blind price increases unintentionally force shifts in SaaS customer segments
“If you're just increasing your prices and you're not thinking about it, at a certain point, you change the nature of your customers. So you might go from prosumer to mid-market, you suddenly might go from mid-market to enterprise, and then that changes how you…”