SaaStr · 2012-10-31
· 4963d
Deal Size, Not Pricing, Defines Your SaaS Business Model
The article argues that deal size (price per seat × number of seats) is far more critical than pricing mechanics in determining a SaaS company's go-to-market strategy, sales structure, and overall business model. The author provides a framework mapping different annual deal size ranges to appropriate sales and marketing approaches, from freemium models at $60-$1,000 to enterprise field sales at $100k+.
Metrics in this report
Enterprise Deal Size Threshold
100000$
minimum
Annual deal size for pure enterprise model
Intuit Customer Acquisition from Word-of-Mouth
80%
minimum
Intuit from inception to 2012
Maximum Cost per Customer Acquisition
4000-5000$
sustainable range
For $20k+ annual deal size
Minimum Annual Deal Size for Field Sales
5000$
minimum threshold
SaaS companies
Minimum Annual Deal Size for Inside Sales
1000$
minimum threshold
SaaS companies