Fuentes: Annual SaaS contracts trade product feedback for upfront financing
Rod Fuentes · 860 10% Churn: When SaaS Pricing Gets Attached to Campaign Driven Product · Dec 1, 2017 · at 10:25
Rod Fuentes, co-founder and CEO of ListenLoop, explains the strategic trade-offs between annual and month-to-month SaaS pricing models.
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“The length of your SaaS contract is a tool that you should use. It's a tool either for financing, in which case you should use annual contracts, get money up front, and you could use that for growth, right? However, the penalty you pay for using the tool on that side of the spectrum is you don't get as much feedback.”
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“Gross churn, I'd say, is probably about, like, 10% or so on a month-to-month product.”
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“I can do an ad that, you know, shows my face and your face together in an ad just for you that follows you around the web. And man, that gets some attention, you know, like, thirty-time average click-through rates, and because we sell to marketers touting this…”
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“Probably on average, we probably get clients who, you know, the 80% long tail is maybe 400 dollars a month in terms of where they're starting off.”
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“So we raised capital in 2015 was our last raise, a total of two million up to that point. And you know, it was a seed round and we've been pretty much cashflow positive for the last year.”