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Comment by phkahler | Hacker News Reader

>> 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.

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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....

The Data Act allows for termination penalties in cases like that. You just have to make sure they're clearly disclosed in the contract.

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.

But there is once you remain competitive, if the reason for people staying on your platform is because they're locked in for 3 years then you're not offering a good enough service as others. This opens the market to competition who will offer better services or prices. The free market at work.

First off, we all know that unfortunately just offering the best product is not enough to guarantee that a customer will pick you and stay with you. Secondly, because of the use of ARR as a key metric that lock in has an extra benefit to the SaaS provider in dealing with investors.

> Secondly, because of the use of ARR as a key metric that lock in has an extra benefit to the SaaS provider in dealing with investors

I'm sorry to the investors but I'll still prioritize users experience in the saas lifecycle.

Sure, but again the issue is that this is the incentive behind those discounts and when that incentive goes away justifying that discount is that much harder.

Customers don't care about investors - they bring zero to the table.

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