Financial Modeling
We have three pricing plans in b2b SAAS. We charge our customers price = cost (cloud provider) + overhead (our service). let's say our overhead is 20% for cheapest plan. We want customers to buy or upgrade to more expensive plans by making our overhead lower (e.g. 15% overhead). Is there a good financial / optimisation approach which would allow us to find best overheads based on volume of things customer buy? So we could optimise simultaneously price for customer (lowering price per unit) and our profit? Sorry if it's super naive question, but I'm not even sure where to start googling
3
Answers
Business Strategist & Conversion Expert
I'm concerned that I don't see a back end to your funnel here. Looks like you only have small, medium, and large of one service.
Rather than concentrating on discounts and discounting methodology, why don't you look at Cost of Customer Acquisition?
If you knew that number, you'd know what you have to make to break even.
I also think you're hamstringing your lifetime customer value by limiting yourself to one service. There's nowhere 'up' for your customer to go.
If you knew the CAC and LTV of your buyers, then you would know exactly what you had to charge. You'd understand even taking a loss on the front end because it lead to a big profit on the back end would be a possible strategy. But right now, you don't have a clear picture; that's why it's so hard to decide.
Answered almost 9 years ago
+10years in S
Hi there, yes there is! I can guide you and build for you a customized model.
Answered over 8 years ago