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Only trade margin for multi-year lock-in if churn is your bottleneck
◆ 65RelevanceOn a story from SaaStrMay 28, 2022
Locking in long-term contracts at a discount can backfire if your AI infrastructure costs or product value shift significantly. Only sacrifice margin if you have a proven churn problem that multi-year commitments actually solve.
Takeaways
- Base discounts on your specific churn data, not generic industry benchmarks.
- Avoid 5-year terms; AI product cycles move faster than long-term contracts.
- Prioritize protecting your margin over securing upfront cash in high-growth phases.
Read the original at saastr.com
Dear SaaStr: How Big a Discount Should I Give For Multi-Year Deals?
fmode.me/n/dear-saastr-how-big-a-discount-should-i-give-for-multi-year-deals
Written by Founder Mode using gemini-3-flash-preview, from the publisher's own summary. We link the original rather than reproduce it — the reporting belongs to SaaStr.
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