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A corollary is that your SaaS product needs to be priced in a way that enables sales (typically >$5K ACV).


Not only to enable sales, but to also show the business problem you are fixing is important. I've been in enterprise deals where if the price tag is too low, the executive doesn't think it's important enough for him/her to fix. It can sound crazy, but once you've tried to fix big problems at that level it makes some sense.


Could you be more explicit please? I have no idea what's ACV.


Annual Contract Value.

The lower your price, the more your product and sales process needs to be self-service, because you can't afford to send a salesperson out for a $1000/yr contract (airfare + hotel + rental car + their time, annnd you're over any possible return, even before including R&D and support costs)



With SaaS, LTV is a more important metric than ACV since you need to take into account average retention, up/cross-selling opportunities, and more. If you take into account CAC even better.

Armando Mann over at RelateIQ uses Cohort Growth to measure LTV for each customer within a cohort to ensure the business is growing taking into account the bottom line.


This is a non-obvious point that took me a long time to grok: the way you sell your product is a function of its price, not the other way around. The more you charge, the more high-touch you can get when selling (i.e. with an outside sales force).




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