Avoid One Time Payments

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Today, we’re talking about avoiding one time payments as a SaaS business.

Sometimes it may seem attractive to take a one time fee from a customer, usually for something like consulting or development services. Try to avoid this if you can. Instead, increase the price of the customer’s annual plan proportionately. You can still ask for all or some of the money upfront. I usually suggest asking for 3 months paid in advance.

But with this approach you’re increasing your recurring revenue, with a small hit to overall margins but most importantly: you get to start next year’s contract negotiations at a higher price point. You’ve already upsold them!