Growing your software business requires a deep understanding of essential numbers or ‘metrics’ that help run your business. One such crucial metric is the Revenue per Demo, which can help you handle significant changes like adjusting prices.
As a SaaS Sales Coach, I get questions from my clients about pricing all the time.
Revenue per Demo means the total money earned for each demo you conduct. This metric becomes especially important when you change your pricing. During such times, you might worry about whether your customers will accept the new price or leave, increasing your churn rates.
While it may sound scary, raising prices sometimes leads to fewer deals. Sometimes, it makes your product seem more valuable, leading to more deals. But if the number of sales decreases, you’ll need to check if changing the prices is a good decision.
That’s when Revenue per Demo becomes useful. Let’s say you did many demos and closed deals before changing your prices but at a lower price point. Now with the higher prices, the number of closed deals decreased. But does that mean you’re earning less money? The Revenue per Demo metric can answer this.
If you’re earning more money per demo after increasing the price, it indicates that your pricing change was successful. But if it’s less, it could mean that your sales team needs to explain the new prices better or the sales process needs to be improved to match the unique price point.
Keeping track of your Revenue per Demo helps identify problems, guiding you toward the right solutions. The problem might not only be with the pricing; it could be an issue with your sales process.
Check out this video here for a complete understanding of key metrics in your SaaS business. It explains specific metrics you need to track, including Revenue Per Demo.
Also, to ensure your demos run smoothly, consider signing up for my course, Software Demo Secrets. I will teach you the basics of conducting impactful demos, which has helped others to double, triple, or even quadruple their close rates.
Remember, Revenue per Demo is more than just a number. It’s a complete guide to understanding your pricing strategy and its effect on your business. Keep a close eye on this number as you grow your business, and you’ll be on the path to success.