PeakSpan Master Class: Optimize Pricing & Packaging to Minimize Churn led by Karen Chiang & Steven Forth
Steven Forth is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talio.
Check out all of our past webinar recordings right here
In this session, we will be discussing how you can leverage intelligent pricing and packaging to minimize churn (optimize gross-dollar retention or GRR).
Churn or a “leaky bucket” is a serious challenge that can handcuff growth for any SaaS business. It is one of the main factors that determines Net Recurring Revenue (or “NRR”). The level of churn is a good indicator of whether a customer is getting value from a subscription.
Every subscription-based business needs to be able to predict churn and have a playbook to manage customers at risk of churn. In this Master Class, we will provide the tools you need to:
Diagnose the causes of churn
Predict churn
Prepare the plays to address each cause of churn
Understand when to act (so you don’t act too late)
Accept that some customers should churn
For a company with an Average Contract Value of $10,000 and churn of 5%, a 1% improvement is worth an additional $50,000 in Customer Lifetime Value per customer, and a 2% improvement is worth $133,000!
Said another way, churn drives Gross Revenue Retention (GRR) down over time.
And the impact of that decline is multiplied when one considers critical SaaS metrics such as Customer Lifetime Value (LTV). For a company with $100,000,000 in ARR, after five periods the difference between 10% churn and 2% churn amounts to $5,832,000 in revenue and of $2,916,000 in LTV. Think about what that does to company valuation.
Packaging and pricing provide many tools to manage churn.
