I just read the AGP’s analyst report, and it has
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Posted On: 08/25/2019 6:20:20 PM
I just read the AGP’s analyst report, and it has some really interesting information about the enterprise app’s pricing:
Under the reseller option, the direct sales company in tandem with Verb sells the subscription to its users and split the fee. In this case, it is $9.95 per user per month. The direct sales company encourages its independent salesmen to download and pay for this tool as it drastically improves conversion rates and the direct sales company and the enterprise communicates with its reps through the application.
The second option is the license subscription option where the direct sales company is purchasing the technology as a tool for its independent salesmen. In this case, the price is $2.50-$3.50 per user per month. On average companies in the license subscription are spending $10,000-$25,000 per month, according to management. The minimum charge for the license subscription is $3,500 per month.
Getting either 5$ or 2.5-3.5$ per enterprise app user per month is definitely better than what I expected, but it seems that at least during Q2 most of the enterprise customers paid a lot less than this. For example, if the 125k new users that were added in Q2 start paying according to either one of these new pricing models, and we assume, for example, the average monthly price per app user to be 3$, that would make 125k x 3$ x 3mo = 1.125mil. So that would be 4.5mil of additional ARR just from those 125k users, even without the in-app purchasing.
However, if it would be this simple to calculate the added revenue from new users, I think the report would have emphasized this fact more. I guess we’ll just have to wait for Q3 and Q4 earnings, which will no doubt give us a lot clearer picture of how well these new pricing models are working, and what kind of SaaS revenue growth we can expect in 2020.
Under the reseller option, the direct sales company in tandem with Verb sells the subscription to its users and split the fee. In this case, it is $9.95 per user per month. The direct sales company encourages its independent salesmen to download and pay for this tool as it drastically improves conversion rates and the direct sales company and the enterprise communicates with its reps through the application.
The second option is the license subscription option where the direct sales company is purchasing the technology as a tool for its independent salesmen. In this case, the price is $2.50-$3.50 per user per month. On average companies in the license subscription are spending $10,000-$25,000 per month, according to management. The minimum charge for the license subscription is $3,500 per month.
Getting either 5$ or 2.5-3.5$ per enterprise app user per month is definitely better than what I expected, but it seems that at least during Q2 most of the enterprise customers paid a lot less than this. For example, if the 125k new users that were added in Q2 start paying according to either one of these new pricing models, and we assume, for example, the average monthly price per app user to be 3$, that would make 125k x 3$ x 3mo = 1.125mil. So that would be 4.5mil of additional ARR just from those 125k users, even without the in-app purchasing.
However, if it would be this simple to calculate the added revenue from new users, I think the report would have emphasized this fact more. I guess we’ll just have to wait for Q3 and Q4 earnings, which will no doubt give us a lot clearer picture of how well these new pricing models are working, and what kind of SaaS revenue growth we can expect in 2020.
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