Tomasz Tunguz Blog · 2017-05-09
· 3313d
Performance Pricing: Why It's a Challenging Go-to-Market Strategy for SaaS
Performance pricing for SaaS companies, while theoretically rational, creates significant market challenges by shifting pricing power to customers. The model commoditizes categories, increases churn risk, and undermines sales team leverage, making it viable only for startups with substantially superior products and efficient self-serve acquisition.
Metrics in this report
Blog Readership
150000subscribers
current
Tomasz Tunguz's audience of founders and operators
Performance-Based Fee as Percentage of Value
10-15%
theoretical range
Customer willingness to pay for performance-priced SaaS