This week, the Bowery Capital team hosted Jack Altman, Co-Founder & CEO at LatticeHQ, to discuss “Testing SaaS Payment Terms.” Lattice is a platform for employee-centric performance management. The SaaS offering enables easy management of 360 performance reviews, OKR / goal setting & tracking, real-time feedback, and 1-on-1s, amongst other workforce management functions. In today’s show, we’ll talk through Jack’s early thought processes around pricing and outline methods any founder can use to pressure test his or her SaaS payment terms.
Jack Altman is CEO of LatticeHQ, which he founded in late 2015. Since then, the company has raised nearly $10MM, most recently closing a Series A led by Thrive Capital and joined by insiders Slack and Y-Combinator. Prior to Lattice, Jack served as VP of Product at Teespring. Before that he was a Seed investor at Hydrazine Capital. Jack started his career as an investment banking analyst with Gleacher & Company, after earning a BA from Princeton University. With experience in management, product and finance, Jack is a perfect guest to join us in exploring SaaS payment terms. Happy listening!
Today, Lattices’s sales engine is humming along: Lattice now serves over 400 customers including Coinbase, PlanGrid, Cruise, and Birchbox. In earlier days, things weren’t so easy. To begin with, the Human Capital Management software space is a crowded one. Fragmentation is especially intense in Lattice’s category, Performance Management. From full-stack solutions to lite, freemium, or even free SMB-oriented tools, Performance Management offerings vary widely in terms of features and sophistication. This diversity of choice makes zeroing in on the “right” pricing model or payment terms that much more difficult, with so many disparate competitors to frame against.
As Jack also learned that SaaS payment terms and pricing have to be tailored to align with customer value. Like many enterprise software products, Lattice works best when an entire organization is committed. In the case of performance management specifically, input and engagement from employees and managers is a must-have; garbage in, garbage out. Through testing, Jack found that low pricing schema, highly flexible SaaS payment terms, and long trial periods—common in SaaS HR tooling—failed to reinforce this user buy-in. Without sufficient time and resources committed, the system was undersupplied with data, and hence too many customers reaped the rewards of Lattice’s full value. Interestingly, only by increasing the ask to adopters upfront was Jack to maximize value discovery for his users. As Jack will discuss, he spent a lot of time A/B testing various SaaS payment terms in particular streamline time-to-value. By iterating on these levers, he was able to better optimize the company’s sales funnel for max user benefit, reducing CAC and driving top-line growth simultaneously.
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