🤔 Improving your SaaS Unit Economics without layoffs?

4 Ways to save  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ Hey Folks! I read this [Twitter thread by Tom Loverro](, a well-known SaaS investor, on the outlooks for 2023 & advice for companies looking to raise funding this year: [Image] As one of his points, he mentioned improving Unit Economics over fuelling growth in 2023: [Image] But it seems that recently, the SaaS world reads "improving unit economics" = layoffs.  ❗ Layoffs are not the only way to improve your Unit Economics❗ In fact, they don't address the reasons that got you to this point in the first place. What can you do instead?  If you Google "SaaS Unit Economics" you will read mostly about CAC and LTV. But this thinking is flawed. In a recurring revenue model, especially with monthly plans, you keep "selling" to your customers throughout their Customer Lifecycle. Your Customer Acquisition Cost is also your Customer Maintenance Cost - and things in SaaS look pretty dismal in this department. Here are a few things you can do to make massive savings and improve your unit economics *a lot* without layoffs: 1.  Implement Reactive Product Experiences to Save $10,878 per month  Using your customer support to answer repetitive questions that could have been automated with reactive tooltips / answered with a Resource Center - is a gross mismanagement of resources. But it's so pernicious because it's the "money you cannot see". But think about it in terms of the ticket resolution cost: Ticket resolution costs by escalation level in the US (source: Informa Tech) - Level 1 Ticket: $22 - Level 2 Ticket: $91 - Level 3 Ticket $195 - Field Support: $416 - Vendor Support: $1015 Now, what if I told you that resolving a ticket through customer self-service costs just $2. That's $22 - 2 = $20 savings per ticket. Now, according to Zendesk, mid-sized companies get on average 777 support tickets per month: [Image] So we asked 24 companies with 700 employees (on average) what kind of support tickets they get most often. It turned out, nearly ​70% of the frequently asked questions are... “How to use {a feature}” 🤦‍♀️ Something you could totally automate with an interactive walkthrough. Now, let's do some maths: 0.7 x 777 x $20 = $10,878 potential savings per month, at least! From "just" implementing some reactive self-serve support. One of our customers,[GrowthMentor, reduced their support tickets volume by - 83%]( after implementing a Resource Center (+ onboarding checklist).  So how to (easily) achieve Product-Led savings in Support? - Collect your support FAQs and map them on the user journey (= when the users typically ask them) - Build interactive walkthroughs and reactive tooltips attached contextually to the UI elements (“features”) that your users typically struggle with. Trigger them contextually (e.g. when your user hovers over them.) 👉 [Userpilot]( let's you trigger in-app experiences based on user behavior in real time. - Add them + your help docs + video tutorials to a searchable Resource Center inside your app, so the users can find answers to their questions whenever they need them: [Image] Of course, you can easily build such Resource Center in [Userpilot](, in minutes, without coding. 2. Increase your pricing [Image] Partick Campbell from Profitwell has said that many times in[his conference talks](: Companies that change prices more often have a higher ARPU. Going upmarket will obviously boost your unit economics. Also - even though larger deals typically have longer sales cycles, they tend to buy annual plans and stick around for much longer. But should you even dare to increase your pricing in this climate? 🤔 If you're getting cold feet at the mere thought of increasing your prices in this climate - don't take my word for it. Learn how to increase your pricing to drive more revenue now from Krzysztof Szyszkiewicz, former McKinsey analyst and the co-founder of Valueships [SaaS pricing consultancy](, in [our upcoming webinar next Wednesday!Â]( [Image](  3. Identify your [CSQLs](& push for expansion revenue [CSQLs]( are the top customers that have been identified by your CS team as having a high upgrade potential. Obviously - if you generate expansion revenue from existing users, you don't add more CAC to this conversion. Upsells also reduce your net churn. You can pretty much eliminate the human cost of identifying CSQLs by using proper customer segmentation based on in-app behavior (in-app events that identify highly engaged customers.) Using the data, you can [segment customers]( based on their in-app behavior and engagement and offer more personalized and contextual offerings to the CSQLs. [Userpilot’s]( advanced segmentation functionality helps you accurately perform [behavioral segmentation](. It puts customers into groups based on their common characteristics, such as feature usage, feedback, engagement levels, satisfaction levels, etc., to help you build more personalized long-term relationships with customers and in turn, generate more revenue. [Smarter Segmentation - Userpilot]  How to drive revenue growth with CSQLs? [Thumbnail for video]( [Here are a few quick in-app hacks:](  👉 Use modals to prompt account upgrades contextually [Contextual Upsell Opportunity - Loom] 👉 Offer premium feature trials:  [Feature Trial - Asana] 👉 Reward loyal customers and encourage referrals  [Customer Loyalty Program - Dropbox] 4. Back off with the Daily Standups & Save $7,433 per month  “£72,540. That’s the approximate annual cost of your daily standup. Assuming 6 developers on £75,000pa, you’ll be lucky to get change from £100,000 to hire each developer after you’ve paid employers NI, pension contributions, and other benefits. Broken down to a day rate, that comes out at about £430 a day, or £54 an hour. With a 23 minute unproductive context switch either side of a 15 minute standup meeting, you’re going to be spending £54 per developer, per day (or £12,420 per developer per ~230-day working year) for that ritual. This isn’t about the cost of communication, which is wholly justified. Three quarters of that cost relate wholly to avoidable context switches. Your competitors are busy turning standup into a daily Slack message which a developer can drop in the 5 minutes before lunch, a time when they’ll be naturally context switching anyway.” I will just leave [this fragment from Zapier's memo]( as food for thought here... Remember to join us for the LIVE Wednesday webinar to learn more about [Product-Led Savings!Â]( See you all next week! [Image] Emilia Korczynska, Head of Marketing at Userpilot I'm a marketing manager obsessed with product growth. Wanna talk? Simply respond to this email!  To make sure you keep getting these emails, please add emilia@userpilot.co to your address book or whitelist us. Want out of the loop? Don't remember you subscribed at all? We get it. We sometimes don't remember how we got to our office today let alone how we subscribed to this or that email. 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