Our portfolio companies have had the following experiences with price escalators:
“We started including auto-price increases in our renewals at the start of this year and it’s been surprisingly effective. Our starting point is 10% and we get it more often than not; some customers negotiate us down to the 3–5% range.”
So, if your SaaS contracts don’t have automatic price increases of 5% to 10% upon annual renewal, you’re missing out on free money, negotiating leverage with customers, and improved retention metrics. Visit our website to see median and average NDR date of publicly traded SaaS companies.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at firstname.lastname@example.org://blossomstreetventures.com/metrics/