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The EU Just Killed ARR
21–30 of 98 posts
Re: The EU Just Killed ARR
#22Earlier quoted context omitted.
The issue is you can't use the "I'll give you a deeper discount for a 3 year contract" line anymore. It'll potentially create a situation where customers in the US pay a lot less because they still have that incentive.
>> The issue is you can't use the "I'll give you a deeper discount for a 3 year contract" line anymore. I don't see why not. You can still offer a low price right? You can still promise it won't go up for 3 years. But the customer can now cancel at any time.
Well, if you bought hardware to support that client for 3 years and the client changes their mind 2 months later then you are stuck with this hardware....
Re: The EU Just Killed ARR
#23saas subscriptions is the new gym memberships
Re: The EU Just Killed ARR
#24This is amazing pro-market regulation!
Re: The EU Just Killed ARR
#25Earlier quoted context omitted.
The issue is you can't use the "I'll give you a deeper discount for a 3 year contract" line anymore. It'll potentially create a situation where customers in the US pay a lot less because they still have that incentive.
>> The issue is you can't use the "I'll give you a deeper discount for a 3 year contract" line anymore. I don't see why not. You can still offer a low price right? You can still promise it won't go up for 3 years. But the customer can now cancel at any time.
You can, but the thing that you get as a SaaS company in exchange for that 3 year discount is the certainty that you'd have a customer for 3 years. There is no longer an incentive to offer the discount.
Re: The EU Just Killed ARR
#26As a user, this is great news. I think that the artificial lock-in to services that have near zero cost of on-boarding and off-boarding is not what nice companies should do.
As an entrepreneur, this is amazing news! This means users can now more easily switch to my superior service.
At least this is how I choose to see it. It seems to encourage healthy competition and I'd rather compete on the service quality and value than the cleverness of my contracts and discounts. I'm sure it will hurt the bottom line of some companies, but I'm not sure it's a bad thing.
Re: The EU Just Killed ARR
#27What a complete misrepresentation... Limiting notice period to two months and forcing you to give customers the possibility to terminate at any time is not killing ARR. It might moderately increase churn but even then, unless you are frankly dishonest, not that much. You still have ARR when your customer can terminate their contract. Even yearly discount which the article presents as done for are still a thing with t…
I agree the article seemed disingenous and almost felt like it was shady (can you believe the EU lets them cancel in a sane way?!). When I hear ARR, I don't think of an annual contract. ARR is equivalent to MRR*12 and can be a mix of contract types or even utility spend ($ per bytes). I understand that "committed spend" is when a business agrees to pay $XX annually, but that's not defined by ARR.
Re: The EU Just Killed ARR
#28Believe in your product. Or don't.
Choose.
Can't wait for "capitalists" to speak up against this.
Re: The EU Just Killed ARR
#29Earlier quoted context omitted.
The issue is you can't use the "I'll give you a deeper discount for a 3 year contract" line anymore. It'll potentially create a situation where customers in the US pay a lot less because they still have that incentive.
Prepaid contract. This is a false issue.
Most enterprises don't want to prepay, especially if they can't categorize the spend in an efficient way (ie as CAPEX)
Re: The EU Just Killed ARR
#30Offering a discount for longer contracts and jacking up the price for shorter contracts have no noticeable difference to either party.
I feel like this article is thus being overly generous. The EU simply wants consumers to be able to cancel digital products that have no marginal cost anyway, which makes intuitive sense imo.