While the value of any SaaS business is derived from recurring revenue (ARR), do not forsake non-recurring revenue streams. There are a few reasons:
Offset Real Costs. Implementation often requires real time and resources — onboarding specialists, engineers, integration work, data migration, and training. Charging a fee recoups those costs and prevents the company from losing money on high-effort clients.
Signals Seriousness to the Customer. When customers pay for implementation, they’re more likely to take onboarding seriously. It weeds out tire-kickers and helps ensure they allocate internal resources (like IT or ops) to make the rollout successful.
Improves Customer Success Metrics. Companies that invest in implementation tend to have better long-term outcomes: higher activation rates, better product adoption, and lower churn. Paying for setup encourages users to commit to the product.
Custom Work Justifies It. If implementation includes tailored integrations, custom workflows, or training programs, it’s entirely fair to charge for that extra value. These services often require high-skill labor, which should not be bundled in for free.
Creates a New Revenue Stream. For mid-market and enterprise-focused SaaS companies, implementation fees can be a material line item — particularly if onboarding involves professional services or change management consulting.
Protects Margins on Smaller Contract. In lower ACV deals, implementation fees prevent customers from being a net loss during their first months. Without it, onboarding costs can dwarf early revenue, especially for SMB-focused products.
Psychological Framing for Discounts or Upsells. You can use implementation fees strategically: waive them to close a deal faster or discount them if the customer agrees to a longer contract. This gives the sales team flexibility without touching subscription pricing.
Below is non-recurring data at the time of IPO for the last 77 SaaS companies (data goes back to October 2017). 29 out of the 79 broke out non-recurring streams. The list shows that some of the largest SaaS success stories derive significant revenue from non-subscriptions sources.
Of the 77 companies, on median and average, 10% and 14% of revenue is derived from non-recurring streams. Note companies like Evercommerce (31%), Qualtrics (27%), Health Catalyst (37%), Informatica (50%), and Zuora (28%) all derive a significant portion of revenue from non-recurring streams, and they all enjoy strong revenue growth and retention.
If you’re generating revenue only from subscriptions, there is revenue you’re leaving behind as enterprise class customers do expect to pay implementation fees.
Thank you for reading. Visit us at blossomstreetventures.com for more SaaS data and metrics and email the author at sammy@blossomstreetventures.com or connect on Linkedin.