Buying SaaS is like buying toilet paper

Do your customers pay more for toilet paper than your product?

You only charge $40/month for your app. But the public still complains. Why can’t it be a one time payment. Why must I pay for your app every month?

Your response probably falls into one of these categories (ordered by effectiveness):

  • Without us, your business earnings would be lower by $4000/month
  • You don’t have to hire a full time staff member saving you $6000/month
  • Payments match up with your monthly cashflow better than a large initial outlay
  • We are continually improving the product so the payments support the development
  • We have non-zero costs like hosting that must be paid for somehow
  • You pay more for toilet paper in your office each month

Comparing your business to the cost of toilet paper isn’t something you’d say directly to a customer. But I’ve read it discussed on forums 1 and heard it mentioned casually in conversation between founders on more than one occasion.

You pay more for toilet paper in your office each month

The argument is that the cost of your product is so low, that it’s less than the cost that your customers spend on toilet paper each month. So your business could provide any marginal benefit and still be a good deal for the customer.

Toilet Paper Cost Calc

$  per month

Using this toilet paper cost estimator a business of 64 staff will spend $40 per month on toilet paper.

For those whose product doesn’t deliver measurable business results, this will be a handy tool to leverage in your next sales call.

Footnotes

Published: July 30 2013