How SaaS Companies Can Fight Inflation
News, insights and updates from the team at Bloom Equity Partners
Happy Friday fellow weekly bloom readers!
We are back with another Weekly Bloom- this week we’re sharing some insights on inflation and how SaaS CEOs can reassess their pricing.
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SaaS Companies Guide To Fighting Inflation
With inflation on the rise, rising prices is a thought that’s on every Saas founder or operator’s mind. Do you raise prices or cut costs? Morad Elhafed, GP @ Battery Ventures, shared his thoughts on why CEOs should rethink pricing structure:
Opex costs are rising
Costs of wages, benefits, and other operating expenses have increased over the past few years. In order to stay competitive with wages and product development, you must raise prices or cut costs which could gradually diminish your product.
Value is generally conflated with price
New competitors are entering the market with different price points and product offerings. Your software offering has probably evolved too and it’s important for your pricing to adjust to your positioning.
It’s important for operators to quantify the impact of your product v.s the pricing that your customers are paying.
Increasing pricing is a smart business strategy
Pricing increases show that you understand the value of your product offering. Not raising prices amongst inflation headlines may suggest a lack of faith in your software.
Charging a high price point demonstrates that you are a market leader. This allows your team to continue to innovate and build great products.
TLDR: Raising prices is often assumed to increase churn, which is usually not the case. “Raise your prices fairly. If customers rely on your product, they want you to survive financially.”- Morad
You can check out the full article: here
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End Note 🔚
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About Bloom Equity Partners
Bloom Equity Partners is a lower mid-market software-focused private equity firm, leveraging deep operational and commercial experience to create enduring market value for the benefit of our investors, founders, and their companies.
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