This template provides the basis to calculate sales discounts in Multi-year contracts.
This is a crucial process to carry out in any SaaS business, since churn and discounts will attract customers to buy longer contracts.
The tool is user-friendly and very straightforward.
Once you have downloaded the SaaS Multi-year pricing calculator, you then need to insert in it the following pieces of data:
- Renewal rates by contract length;
- Average customer Accounting Rate of Return;
- Average subscription sales discount by contract length.
This step will outline your baseline which will enable you to find out the comparison between your revenue and the contract length.
Afterwards, you will need to modify the input of the sales discount. At this stage you will be able to determine the discount to propose before the revenues of your long-term contract revenues fall below the revenues of your single-year contract.
This calculation will give you a more precise idea of where you can set your discount on Multi-year contracts.
Should you have any comments or questions, feel free to get in touch. You can either start a discussion below or contact me via private message.
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