Top 5 Ways to Increase ARPA for Your B2B SaaS Company

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B2B SaaS

It’s all about revenue. Isn’t it?

The best thing about being a SaaS business is that you get high customer retention (Thanks to automatic payments).

However, in the quest to sustain or improve customer retention, many SaaS businesses start to struggle with the revenue generated per account. And this is where the problem begins.

You get obsessed with your pricing strategy and feel reluctant to make any changes. But you can’t increase the ARPA without making the change.

To help you out with this, here I’m sharing the most effective and safe strategies:

Top Ways to Increase ARPA for Your B2B SaaS

The following strategies can help you increase your average revenue per account:

1. Stop Promoting the Freemium Plan

Many B2B SaaS businesses rely on a prosumers model, where most of their customers use the free plan, and only the power users pay for the premium. The most near example I can recall immediately is – Canva.

The point is not to abolish the free plan entirely but not to advertise so aggressively. Try to restrict more features with your free plan and entice free users to pay the premium.

This way, you will continue to let your customers have a feel for your product without having to pay and generate more revenue at the same time.

2. Employ a Recurring Billing Software

Using automated billing software, businesses can eliminate the risks associated with financial systems or spreadsheet-based processes that are immature. This will enable you to input and charge customers more accurately and on time, leading to a healthier financial situation for your company.

Most importantly, the subscription billing software can remind customers to keep their credit cards charged so that they don’t have their subscriptions paused or canceled. This can significantly reduce payment failures and allow for revenue retention.

3. Use Upsell Techniques

Bringing the freemium plan strategy to the next level, the upselling tactics persuade customers to choose a more expensive option, an upgraded version, or some other product variation that is worth more but costs the same amount.

To enable this strategy, some businesses offer tiered pricing plans, which give customers additional benefits if they choose the most expensive plan. Customers should also be assured that upgrading is worth the money.

Product “upgrades,” for example, are always meant to make life easier for your customers. When done correctly, upselling not only boost ARPU but also increases the number of orders and boosts customer loyalty and customer lifetime value.

4. Offer Flexible Prices

Consumers are getting wiser about the way they allocate their money. Of course, competitive prices are always good for customers, but why not give them some wiggle room? When done properly, flexible pricing may boost your profits and sales.

Your business can adjust to customer demand or a changing business landscape if you use flexible pricing.

An example of this strategy is – Suppose your B2B SaaS business provides various solutions in different price categories. But customers require a set of features not included in your SaaS startup’s pricing plans. In such cases, you can offer them a customized price for the features they want.

5. Run Personalized Email Campaigns for Low-Tier and Free Users

Tiered-pricing models provide you with a lot of opportunities to upsell, making it one of the best SaaS strategies for growth. Customers can test the waters with lower-tier prices.

They can then upgrade to more expensive plans as and when they need more advanced features. And one of the ways to encourage them to upgrade is by sending personalized emails.

On the other hand, you’ll eventually want your free users to become paid ones. You can use personalized emails for them as well.

The personalized emails should describe to customers what they miss out on if they do not upgrade to premium and what they would acquire once they do. The point is not to include all of these things in one email. Instead, use a sequence of tailored ads to persuade your clients.

You can convince your customers to upgrade by adding diverse marketing components, including discounts, social proof, and other perks.

Final Note

Some of the strategies I’ve mentioned here aren’t too difficult or expensive to implement. There are certainly some quick wins here that are worth trying.

One thing to note is that when testing a particular strategy/tactic, run the experiment for a significant duration of time, such as three months. Then, compare the growth percentage between the two periods regardless of whether you have a large turnover.