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.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at sammy@blossomstreetventures.comhttps://blossomstreetventures.com/metrics/
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