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What patio11 says is true. Our churn rate is under 1% on our highest accounts, and occasionally double digit on the cheapest. I've gotten lots of other SaaS own

What patio11 says is true. Our churn rate is under 1% on our highest accounts, and occasionally double digit on the cheapest. I've gotten lots of other SaaS owners drunk and we all share the same experience. When it comes to low prices, people will make up any random reason they can "logic up" in absence of facts. Sure, "low prices to reduce churn" sounds totally logical, but it's utter bullhockey. Don't believe it. Always ask for the data.

jimzvz 14y ago
Is this due to the pricing or that it is the cheapest offering?
- ahoyhere 14y ago
  False dichotomy. There are a million other potential explanations. As for what it is in each specific case, quite possibly different. For us, it's a combination of factors: 1. Our lower plan is for freelancers. Freelancers are basically by nature unprofessional, and suck at business. (Saying this as a former freelancer who fit that bill for a long time.) Freelancers go out of business all the time, and they also don't engage in professional practices with any great will. Larger plans -> larger teams -> more professional and more durable as a business. They also tend to evaluate software more carefully and then stick with what they pick because A) they don't get paid to try out infinite software packages, B) they do actually want to get paid and not procrastinate or diddle around pretending to look for the perfect tool, C) getting a whole team off one tool and onto another takes valuable time & energy away from actual work. 2. Cheap customers are always the worst. Always. This cuts across all industries. People who shop on price are not the people you want to deal with… they are the most demanding and again far more likely to quit! You'd think lower prices would mean lower expectations but it seems the opposite is true. These people can scent a low price a mile away through the muddy waters of the internet, and once you attract them, the only way to shake them is to raise your prices. We have friends who run software that's more urgently needed than time tracking — something that couldn't, theoretically, be replaced by a nasty Excel spreadsheet -- and they see exactly the same behavior even though in theory even their smallest, cheapest customers ought to be professional and on the high end of the tech savvy scale. You simply cannot believe how much happier they are since they dropped their lower plans entirely. We too have seen a decline in crazy support emails since we raised our prices across the board.
  - jimzvz 14y ago
    Thanks.

jimzvz 14y ago

Is this due to the pricing or that it is the cheapest offering?

ahoyhere 14y ago
False dichotomy. There are a million other potential explanations. As for what it is in each specific case, quite possibly different. For us, it's a combination of factors: 1. Our lower plan is for freelancers. Freelancers are basically by nature unprofessional, and suck at business. (Saying this as a former freelancer who fit that bill for a long time.) Freelancers go out of business all the time, and they also don't engage in professional practices with any great will. Larger plans -> larger teams -> more professional and more durable as a business. They also tend to evaluate software more carefully and then stick with what they pick because A) they don't get paid to try out infinite software packages, B) they do actually want to get paid and not procrastinate or diddle around pretending to look for the perfect tool, C) getting a whole team off one tool and onto another takes valuable time & energy away from actual work. 2. Cheap customers are always the worst. Always. This cuts across all industries. People who shop on price are not the people you want to deal with… they are the most demanding and again far more likely to quit! You'd think lower prices would mean lower expectations but it seems the opposite is true. These people can scent a low price a mile away through the muddy waters of the internet, and once you attract them, the only way to shake them is to raise your prices. We have friends who run software that's more urgently needed than time tracking — something that couldn't, theoretically, be replaced by a nasty Excel spreadsheet -- and they see exactly the same behavior even though in theory even their smallest, cheapest customers ought to be professional and on the high end of the tech savvy scale. You simply cannot believe how much happier they are since they dropped their lower plans entirely. We too have seen a decline in crazy support emails since we raised our prices across the board.
- jimzvz 14y ago
  Thanks.