Ask HN: What are your average per-customer cost for your SaaS product?

https://news.ycombinator.com/item?id=22281007

by salehenrahman • 6 years ago

1 2 6 years ago

news.ycombinator.com

This includes hosting, and labor.

I'm trying to figure out what is the least amount I can charge my customers, so that my product does not fall below a threshold that leaves it cashflow negative, requiring us to shutter our services.

paktek123• 6 years ago

I've seen many use $5 per user per month used very commonly across monitoring/alerting solutions as an entry point.

troydavis• 6 years ago

Unless you’re deliberately operating a not-for-profit (trying to cover expenses and nothing else), value-based pricing generally makes more sense than cost-based - particularly for SaaS where the marginal cost of a new customer is low. Lots more: https://www.google.com/search?q=value-based+pricing+saas

Regarding your exact question, since there’s no average number of customers (denominator) or average total expense (numerator), there’s also no use in an average cost-based price. About as close as one can get is to look at the average gross and net (ie, overall) margin of existing SaaS companies. That’s interesting but not a great way to set prices, since prospective customers don’t know or care. They care what your thing is doing for them and how much that benefit (time savings, pleasure, etc) is worth to them.

Ask HN: What are your average per-customer cost for your SaaS product?

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