This year, Audio Developer Conference is also bringing back ADC Workshops as part of the main schedule, available to both in-person and online participants. Taking place on the first day of the event (Nov. 10), workshops will run alongside a full program of 18-minute talks. Spots for workshops are limited and require registration, so participation will be on a first-come, first-served basis. It’s the perfect opportunity for developers, educators, and students around the world to learn, connect, and exchange ideas in real time.

Where to Get Tickets

Still need tickets? Head over to the registration page to grab your ticket today.

How to Connect With FastSpring

You can connect with FastSpring at our virtual booth during Audio Developer Conference through the Gather platform. Simply navigate to the exhibitor area, find the FastSpring booth, and drop in to chat with our team. We’ll be online to answer questions, share insights, and help you explore how FastSpring can help you grow and monetize your audio software.

Already know that you want to meet with a FastSpring expert during the event? Schedule a demo today.

FastSpring is the leading merchant of record for global SaaS and software companies — powering over a billion dollars in worldwide transactions every year. We’ll manage your checkout, VAT and sales taxes, compliance, and more, freeing you to focus on what you do best: building great audio software. Founded in 2005, FastSpring is a privately owned company headquartered in the U.S., with offices in the Netherlands, Singapore, Canada, the U.K., and Ireland. For more information, please visit https://www.fastspring.com.

The post FastSpring Sponsoring ADC Bristol 2025 appeared first on FastSpring.

And as our annual SaaS and software benchmarking data report has shown across the last few years, the shopping spike doesn’t just apply to physical goods like clothing, jewelry, toys, or electronics. 

End-of-year budget spending certainly contributes to this effect too.

Is your SaaS or software business ready to take advantage of the B2B and B2C spending sprees? 

FastSpring is a merchant of record for over 3500 companies that use our platform daily. By analyzing years’ worth of aggregate sales data, we have helpful insights to share about Q4 sales spikes for software and SaaS businesses.

Below, we share this year’s insights into:

• The latest U.S. trends in year-end SaaS and software sales data.
• The latest global trends in year-end SaaS and software sales data.
• How FastSpring can help you best capitalize on Q4 sales spikes.

FastSpring is a merchant of record that can help you easily grow your business internationally. We provide an all-in-one payment platform for SaaS, software, video game, and other digital product businesses, including VAT and sales tax management, payment localization, and award-winning consumer support. Set up a demo or try it out for yourself.

Our Data Sources and Analysis Methodology

Where the Data Are From

FastSpring helps companies sell digital products in over 200 countries, but to help us keep this study consistent and repeatable, we’ve pulled sales data from eight countries around the world. 

Each year, we include the U.S., Canada, Germany, Great Britain, India, Brazil, Australia, and China.

This data are specific to where the sales took place, not where the companies are located.

To show a glimpse into one specific country that’s also a large, often-targeted SaaS and software market, we also show the same trends for just the United States.

When the Data Are From

To highlight useful trend data while avoiding any major outliers skewing the data, we use aggregated data for the most current five calendar years. The data below represent sales across 2020-2024.

We also use a seasonal index to show quarterly or monthly sales against a year’s monthly or quarterly average (read more about that in the How section below).

What We Measured

FastSpring supports the sales of a vast array of digital products, including SaaS, software, video games, mobile apps, AI, and eLearning. 

To narrow this report to a specific type of industry, we’ve excluded everything but software and SaaS.

We also used U.S. dollars as the currency for all figures to make comparison easy and clear. 

How We Measured It

To establish a baseline, we calculated monthly and quarterly averages for each year. 

For a very simplified example, if four quarterly totals were $200, $200, $100, and $300, the quarterly average for the year would be $200. 

Then once we had the period average for the year, we compared each period’s actuals to that period average to get a percentage.

So for example, if Q3 shows a percentage of 90%, it means the sales total that quarter was 10% lower than the year’s quarterly average. If Q4 shows a percentage of 111%, that means Q4 sales totals were 11% higher than the year’s quarterly average. 

We then combined that data across five years to get the five year averages and avoid any outliers causing a sharp spike that might have skewed the results too much. 

US Year-End Trends for SaaS and Software Purchases

The following data show the monthly and yearly averages for U.S. software and SaaS sales across the last five years.

5YR Average US SaaS and Software Sales by Month

In the U.S., the three highest monthly spikes of SaaS and software sales are in March (104%), December (105%), and as expected, November (112%).

5YR Average US SaaS and Software Sales by Quarter

Similarly, Q4 is the highest-performing quarter for software and SaaS sales at 106%, with Q1 at 99%, Q2 at 97%, and Q3 at 98%.

Global Year-End Trends for SaaS and Software Purchases

Global trends show even stronger spikes in November and Q4, thanks to particularly strong sales in China and Germany (more on that below). 

5YR Average Global SaaS and Software Sales by Month

Just like in the U.S., global sales of software and SaaS spiked slightly to 104% in March and 105% in December. 

But as expected, the spike in November was higher than just in the U.S., at 118% globally.

While Black Friday and Cyber Week have traditionally been anchored to the Thanksgiving holiday in the U.S., seasonal sales surges have caught on worldwide, perhaps thanks to other countries such as Germany observing Black Friday and Cyber Monday (or even an entire Cyber Week), and China observing Singles Day on November 11 (11.11). 

5YR Average Global SaaS and Software Sales by Quarter

Quarterly sales reflect a slightly smaller spike over the shopping holiday season when Oct.-Nov.-Dec. are averaged together, but the spike is still significant at 8%.

Because the quarterly spike isn’t as high as the single spike in November, it reinforces that software and SaaS companies should focus their marketing and sales efforts specifically in November to get the best return and see the most growth. 

5YR Average SaaS and Software Sales by Month per Country

To illustrate the changes in various countries (and give you an idea of which countries may be most worth targeting), we’ve also broken out the monthly data by country for the eight countries we included in this survey. 

Here’s what monthly software and SaaS sales fluctuations look like with five years of data for the United States (US), Canada (CA), Germany (DE), Great Britain (GB), India (IN), Brazil (BR), Australia (AU), and China (CN).

We mentioned the China and Germany shopping holidays in November above, but China also sees spikes in April and June, likely due to the 418 (April 18) and 618 (June 18) shopping holidays.

Regardless of other monthly spikes throughout the year, November is still the single highest spike for any of the eight countries we included — ranging from 112% in the U.S. and 117% in India on the low end, to 148% in Germany and 149% in China on the high end.

SaaS and software companies can capitalize on this trend with:

• Email promotions.
• Custom partner coupon codes (which they can help you promote).
• Social media campaigns.
• Upsell or bundle offers.
• Localized promotions that would especially appeal to customers in each of your targeted regions.
• A merchant of record partner for online payments that can help you easily sell your software or SaaS worldwide.

How FastSpring Can Help

Software companies that already use FastSpring know why we’re a trusted partner in the global payments space. (Check out what Avid and Stardock have to say about the great experiences they’ve had with FastSpring, or find more FastSpring customer stories here.)

But if you’re new to FastSpring (or to the merchant of record model), here are some of the reasons our customers love using FastSpring to sell their software around the world.

FastSpring Makes Global Payments Easy for You and Your Customers

Payments Localization

Making your product available for purchase in more countries is only part of taking a software business global. 

You also have to make it very easy for users to make the purchase, with the least hesitation possible.

That requires presenting a localized checkout experience — including automatic conversions to local languages and currencies, offering dozens of the most popular payment methods (which vary by region), intelligent payment routing to regional payment gateways (to help reduce failed payments), and more.

To support improved payment localization, we work closely with our customers and payment partners to understand which payment methods are the most valuable in different regions and industries across the globe. 

This has materialized in the release of UPI in India and Pix in Brazil throughout 2025. 

By the end of October 2025, we plan to improve our Pix capabilities with support for recurring payments on subscription purchases. We’re also excited to add Toss payments in South Korea, providing additional support beyond Kakao Pay in the region.

Custom Discounts, Offers, and Coupons

When you’re running campaigns for Cyber Weekend or other regional holidays, you’ll need a partner who can support customizable offers and coupons. 

This includes the ability to:

• Offer percentage discounts on individual items.
• Preapply coupons via custom links.
• Stack multiple coupons.

FastSpring already supports all of those today, but now, we’re adding the ability to apply discounts at the order level to add even more flexibility on promotional planning. Instead of offering discounts on a per-item basis, you can now apply the discount to the entire order — which translates into clearer promotions for your customers, and ultimately, more completed orders. This feature is set to launch by the end of October, with plenty of time for Cyber Weekend prep.

Robust At-a-Glance Reporting

Once you’ve launched your Cyber Weekend campaigns, you’ll need to monitor their success throughout the course of the promotional holidays. 

With FastSpring, you get access to our Welcome Dashboard, which provides an instant view of the health of your business and campaigns. This dashboard shows key metrics such as net sales, orders, subscriptions, and chargebacks — without the need for extra navigation. That makes it easy to understand at a glance how your campaigns are performing.

If you need to dig deeper, you can simply click into an individual dashboard to dig into more specifics around individual products, chargeback rates, churn rates, and even revenue recognition for the future.

With the wide variety of reports available, you won’t have to wonder how your campaigns are performing. Instead, you can glean clear insights into your campaign’s successes or make tweaks to your campaigns if something is trending in the wrong direction.

FastSpring has localized payments, flexible discounts, and visual reporting covered. Learn more about FastSpring’s global payments.

FastSpring Calculates, Collects, and Remits Global Taxes so You Don’t Have To

FastSpring doesn’t just facilitate payments — we’re a merchant of record, which means we become the entity actually selling the digital products.

That also means that we’re the ones who handle sales taxes and VAT. 

FastSpring’s team of experts stays current on global tax regulations so we can calculate, collect, and remit those taxes — so you don’t need to worry about it. 

Learn more about FastSpring’s global tax management. 

FastSpring Has World-Class Support for You and Your Users

FastSpring’s award-winning support team is standing by and ready to help both the companies that use FastSpring as their merchant of record, and the customers who purchase software, SaaS, and other digital products.

For consumer support, customers can submit an online request and get personalized assistance. FastSpring also provides a helpful list of support topics for consumers to browse, including Licenses and Downloads, Checkout and Purchasing, and more.

For software companies using FastSpring as their MoR, you can submit a request from within the FastSpring app, or simply visit our support page.

Read more about our Stevie® award for Front-Line Customer Service Team, our Globee® award for Customer Excellence in the “Achievement in Team Customer Success” category, or submit a seller or consumer support request.

Partner With FastSpring

For over 20 years, FastSpring has been a trusted payment provider that can help you easily grow your business internationally. As a merchant of record, we provide an all-in-one payment platform that includes VAT and sales tax management, payment localization, award-winning consumer support, and more — making us an excellent partner for SaaS, software, video games, mobile apps, AI, eLearning, and other digital goods businesses. 

Set up a demo or try it out for yourself.

The post Cyber Weekend Benchmarking Data: 2025 SaaS and Software Holiday Spend Report appeared first on FastSpring.

For digital-first businesses, the easiest way to manage all aspects of billing is to choose a solution that acts as your merchant of record (MoR). A billing solution that acts as your MoR gives you access to multiple payment processors (which lets you accept more payment methods and is useful when accepting payments globally, as we explain below) while taking on the liability of all transactions for you. An MoR also takes the lead on chargebacks, fraud prevention, tax audits, legal compliance, and more.

When selling physical goods and services (online or in person), various Stripe alternatives built for physical goods payments (such as Amazon Pay, Square, etc.) can provide payment processing, order fulfillment, financing options, and more. (It’s worth noting that most of these solutions can also be used by SaaS, software, video game, and other digital goods companies; however, none of them is a complete payment solution.)

In this guide, we compare eight of the best Stripe alternatives in each of these categories. Since our expertise is in providing MoR services to digital-first companies, we’ll start with an in-depth review of our solution, FastSpring.

Table of Contents

• MoRs for digital goods companies:
  • FastSpring: International payment solution for SaaS, software, video game, mobile app, AI, eLearning, and other digital product businesses.
  • Paddle: Payment infrastructure platform.
  • Verifone: Formerly 2Checkout.
• Billing software for selling physical goods and services:
  • Square: Popular payment platform for startups.
  • PayPal for Business: Available on major ecommerce platforms.
  • Authorize.net: For merchants and small businesses.
  • Adyen: Robust financial technology platform.
  • Amazon: Payment service and order fulfillment.

Note: Information in this article was validated at time of publishing and is subject to change.

If you’re looking for a Stripe alternative to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment platform for SaaS, software, video games, mobile apps, and other digital products businesses, including VAT and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

All-In-One Payment Solutions (MoRs) for Digital-First Businesses

Most companies using Stripe (or something similar to Stripe) know it’s more than just a payment processing platform — but that there are challenges to making the system work for a global SaaS company. It can require tons of add-ons, a complicated pricing structure, and additional fees — and still lack or limit some key features.

For example, Stripe advertises subscription management features as part of the Stripe Billing package; however, many companies end up integrating with another service like Chargebee or Recurly to get the subscription management features and ease of use they need.

Often, digital goods businesses end up with a payment tech stack of over a dozen tools for:

• Calculating and remitting international taxes.
• Accessing additional subscription management features.
• Covering fraud protection.
• Handling chargebacks.
• Implementing a checkout.
• Getting higher authorization rates in other countries.
• And more.

Making it all work together puts a massive strain on the development team.

Plus, you’ll need to maintain a large team of tax and legal experts to stay up to date on regional regulations and maintain global compliance (because solutions like Stripe don’t usually help with legalities). For example, while it’s true that historically, SaaS and ecommerce companies haven’t always needed to pay VAT or sales tax, that’s no longer the case. If you don’t collect and remit the right amount of tax in each jurisdiction where you sell, you could face hefty fines — or even be banned from selling in that region in the future.

Choosing a payment processing solution that also acts as your MoR solves all these problems. 

A merchant of record (MoR) takes care of the entire digital goods billing process for you, including collecting and remitting local and international taxes (such as VAT and local sales tax), staying compliant with local laws and regulations, online payment processing, chargebacks, and much more.

FastSpring Is an International Payment Solution

FastSpring has been acting as an MoR for global software and video game companies for over 20 years, so we know what it takes to expand globally almost overnight. Here are some examples of how FastSpring helped other SaaS and software companies expand globally and increase revenue:

• Mailbird achieved over 100% growth by switching to FastSpring. They previously experimented with platforms like Stripe and PayPal. Read the Mailbird case study here.
• Capture One increased their conversion rate by 40% by switching from an in-house solution to FastSpring to help them with global payments. FastSpring offered them localized checkout experiences that automatically display accurate pricing, language, currency, and taxes around the world. Plus, it was clear that FastSpring is an invested partner with the scalability to grow with their business needs as Capture One expanded their global reach. Read the Capture One case study here.
• SocialBee doubled its monthly recurring revenue and managed tax compliance by switching from Braintree to FastSpring. Read the SocialBee case study here.

Next, we’ll take a deep dive into a few of FastSpring’s billing solutions. 

Note: The following solutions are also offered to digital-first businesses selling downloadable software, video games, app subscriptions, and other digital products. 

Leverage Multiple Payment Processors to Increase Revenue

Many digital-first companies and founding teams initially think they just need one payment processor to accept payments. However, most of those companies eventually end up needing more in order to:

• Accept more payment methods: Customers are more likely to complete a purchase if they can use their preferred payment method. However, not every payment processor supports the same list of payment methods. Working with multiple payment processors lets you accept more local payment methods and, therefore, increase revenue.
• Increase authorization rates for international transactions: Card networks are more likely to authorize transactions when the payment processor is in the same country as the buyer. Some payment processors will establish a legal entity in multiple locations; however, most companies still need to work with multiple payment processors in order to process all payments locally. 
• Accept payments from more countries: Some payment processors only support payments from select countries or regions. Working with multiple payment processors lets you reach customers in more locations.
• Minimize failed payments: Working with multiple payment processors can also solve connectivity issues or system failures. If one payment processor is experiencing a network failure, you can reroute the transaction to a payment processor that’s fully operational. 

With FastSpring, you’ll be supported by multiple payment processors that specialize in global transactions and accept the most common payment options around the world — including but not limited to Apple Pay, Google Pay, ACH bank transfers, SEPA, Amazon Pay, Pix, AliPay, UPI, and more (with more added all the time).

Click here to see the full list of payment methods accepted by FastSpring.

FastSpring connects with multiple international payment gateways, and our platform uses intelligent payment routing to send each payment to the gateway with the highest authorization rates for that payment method and location. Then, if a transaction fails, we automatically retry the transaction using a secondary payment processor.

Related: Top 10 International Payment Gateways: An In-Depth Guide

Prevent Fraudulent Transactions Without Blocking Valid Transactions 

The right fraud protection can help you increase authorization rates, decrease chargebacks, and protect your company from attacks. However, if legitimate transactions get marked as fraud, you’ll lose revenue.

FastSpring takes the lead on fraud and risk activities by partnering with Sift for advanced risk analysis and fraud protection. Sift uses machine learning and AI to analyze millions of global transactions each month to identify risky transactions with higher accuracy. This means your fraud protection is constantly evolving to provide better security and improve approval rates.

FastSpring can also block transactions from countries and jurisdictions where companies are currently not allowed to do business. 

Note: You also have the option to block transactions from certain regions or limit products in each region.

If one of your customers does initiate a chargeback, or there’s an issue with fraud, FastSpring takes the lead to resolve it for you.

Discover more and read FAQs about FastSpring’s GDPR and PCI compliance, how FastSpring helps protect against high-risk transactions, and more.

Avoid High Fines and Penalties by Letting FastSpring Handle Local Legal Compliance for You

Even if all legitimate transactions go through, you could face hefty fines or be prevented from transacting in that region if the transactions don’t comply with local laws and regulations. (For example, the Reserve Bank of India limits automatic recurring payments to ₹15,000 INR, or approximately US$170; transaction attempts above that amount simply won’t go through.) 

Most companies need a full compliance department of legal professionals to keep up to date with all the laws and regulations of each jurisdiction they do business in. 

You can also face fines or penalties if you don’t file consumption tax. SaaS companies didn’t always have to pay tax, but tax regulations for digital sales are changing and being increasingly enforced.

Companies that use Stripe (or another point solution) must handle tax on their own. While Stripe will help gather sales tax, you’ll need other software to collect VAT, GST, and other forms of consumption tax. Plus, you’ll need a staff of tax experts to remit the tax at the end of each tax period. 

FastSpring handles the whole process of calculating, collecting, and remitting global sales and consumption taxes for you by: 

• Collecting all consumption tax (including GST, VAT, SST, etc.) and remitting it at the appropriate times.
• Taking the lead on legal compliance (including audits).

FastSpring collects and files taxes in more than 55 countries, 13 provinces, and all 45 U.S. states with sales tax (the other five states don’t collect sales tax). We even handle tax-exempt transactions in the U.S. and B2B reverse charges (when and where allowed) internationally.

FastSpring is fully compliant with the EU General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Additionally, we renew our level one certification — which is the highest level possible — with the Payment Card Industry Data Security Standard (PCI DSS) every year. FastSpring also participates in the Data Privacy Framework (DPF) for international data transfers. Learn more at our Trust Center.

We build and maintain relationships worldwide with tax law specialists who keep us aware and up to date on laws and regulations as they change.

Manage Everything From Checkout to Subscriptions in One Platform

Instead of building and onboarding a payment stack of over a dozen different solutions to help you manage subscriptions, checkout experiences, reporting, analytics, and more, FastSpring lets companies streamline and manage all aspects of digital goods billing directly from their FastSpring dashboard. 

Below is a brief overview of these features. For a complete list of features (including digital invoicing and interactive quotes) visit FastSpring’s product overview page.

Custom, Localized, and Optimized Checkout Experience

FastSpring gives you full control over your checkout process with our Store Builder Library (SBL). You can customize your checkout, and our team will offer personalized customer support along the way.

We also offer three pre-built experiences. With minimal code, you can embed the FastSpring checkout into a web page or insert a pop-up checkout. Or, if you want to outsource the entire checkout process, you can choose the web storefront option to send customers to a secure web storefront managed entirely by FastSpring. You can also customize the storefront to match the visual branding of your website.

Whichever checkout experience you choose, FastSpring can automatically localize your checkout based on the customer’s location, including translation into 21+ languages and price conversion to many local currencies. You can also set your own language, currency, and price for each region or opt to let your customers choose for themselves.

Related: International Recurring Payments (How We Handle It for You)

Subscription Management

FastSpring lets you create a variety of custom trial and recurring billing models without writing a line of code. You can set up:

• Automatic weekly, monthly, yearly, or custom recurring billing.
• Prorated billing to accommodate upgrades — and downgrades — mid cycle.
• Free or paid trials of any length.
• Trials with or without collecting payment details.
• Automatic or manual renewal.
• Upsells, cross-sells, one-time add-ons, and discounts.
• Automatic failure handling, notifications, and retries to reduce churn.
• B2B digital invoicing.
• And much more.

You‘ll also have access to FastSpring’s developer-friendly API and webhooks library to build more complex custom subscription logic and integrations.

If you want to see how FastSpring compares to Chargebee, read this article. 

Dunning Management

FastSpring handles all failed payments and customer notifications for you — simply choose how you want it handled, and we take care of the rest. Our platform offers flexible dunning management options, which include: 

• Proactive reminders when payment information needs updating. Automatically send flexible, custom email reminders to your customers before a debit or credit card expires. We offer a pre-made email template — or you can customize your own email and set it to send two, five, seven, 14, or 21 days after a payment failure.
• Automatically retry failed payments. FastSpring retries the original payment method multiple times, including before sending each reminder email.
• Flexible failed payment logic. Continue (or pause) service until the last notification has been sent out. Pause (or cancel) the service once all notifications have been sent out and the payment is still getting declined.

With FastSpring, your customers will also have an easy-to-access and intuitive self-serve Customer Account Portal where they can view their order history, update payment information, and manage their subscriptions. The portal is managed by FastSpring but matches the branding of your checkout for a cohesive customer experience.

Reporting and Analytics

While Stripe does offer revenue recognition tools for accounting purposes, many SaaS companies using Stripe end up adding a reporting and customer analytics tool to give them more insight into stats such as MRR, churn rate, new customers by product type or geography, and more. 

FastSpring’s Reporting and Analytics, on the other hand, is a robust suite built for digital products businesses. You can view key performance indicators (KPI) for your customer base and subscription models to better understand:

• How each product contributes to your bottom line. 
• When customers are most likely to drop off.
• What coupons or promotions are working.
• Which subscription models generate the most revenue.
• Where your customers are located.
• What currencies and payment methods customers prefer.
• Chargeback rates by customer segment.
• Chargeback rates by product line.
• The status of your active webhooks.
• And much more.

Our platform features several dashboards, which include:

• Revenue Overview.
• Subscription Overview.
• Revenue Recognition.
• Chargeback Overview.
• Webhook Status.

If you don’t see exactly what you need, you can create and save your own custom reports. You can also reach out to our team for help finding or building the report you need. Export and share reports as a CSV, PNG, or XLSX file. 

For a complete list of features — including Digital Invoicing and Interactive Quotes — visit our website.

One Simple Pricing Model; All the Benefits

Most payment processors (like Stripe) typically charge a low processing fee; however, they’ll charge extra for features such as subscription management, additional payment method support, tax collection, and more. 

They’ll also usually pass along transaction fees such as network/scheme downgrade fees.

Plus, you’ll have to pay for any additional software needed for a complete billing solution — and the staff to manage the entire process. 

For most companies, what starts as seemingly low, flat-rate pricing ends up being an expensive route to take.

On the other hand, FastSpring manages your entire digital goods billing process for one flat rate. You’ll get access to our whole platform — including every feature and all services — in a single comprehensive package. 

Our team works with you to find an affordable monthly fee based on your transaction volume (and you’ll only be charged for successful transactions). Plus, you won’t need any additional software or headcount since we’re liable for transactions and take the lead on sales tax and VAT.

If you’re looking for a Stripe alternative to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment platform for SaaS, software, video games, mobile apps, and other digital products businesses, including VAT and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

Paddle: Payment Infrastructure Platform

Paddle is another Stripe alternative that acts as an MoR for SaaS and software companies. Paddle has features such as: 

• Multiple payment gateways.
• Secure checkout.
• Recurring billing management.
• A robust payments toolkit.
• Fraud protection.
• Transaction and subscription reporting.
• Invoicing. 
• And more.

Learn more about Paddle alternatives.

Verifone: Formerly 2Checkout

Verifone is a Stripe alternative that can act as your MoR or just as a payment service provider. This gives them the flexibility to support small- to medium-sized companies in different industries offering both in-person and online goods or services (e.g., retail and hospitality). 

Verifone functionalities include:

• Integrated point-of-sale (POS).
• Kiosks.
• Subscription management.
• Hosted checkout.
• Partner sales channel management.
• And more.

Some of these features are included with Verifone packages, while others are add-ons with their own additional fees.

With over 20 years of experience serving international software companies, FastSpring is one of the longest-standing MoRs for SaaS, software, video games, mobile apps, and other digital products companies. Use our expertise to help grow your business quickly. To learn more, sign up for a free account or request a demo today.

Stripe Alternative Billing Software for Selling Physical Goods and Services

While digital product companies can use almost any billing solution to sell their product (although some will be more effective than others), not every solution will be effective for companies selling physical goods or services. Companies selling physical goods and services need solutions that can manage both online and in-person transactions. 

When selling physical goods or services, most companies end up using two or more software solutions to build a complete billing solution. However, there are ways to minimize how many you need and how much it will cost you. The best place to start is to carefully consider your current needs (e.g., are you selling in person and online?) and plan for your future needs (e.g., are you a new business owner who might want to start selling online in the future?). 

Then, you can evaluate each billing solution by asking a few key questions: 

• How many aspects of billing does the software cover? Is each offering truly sufficient for your current needs (e.g., maybe they offer a subscription billing solution but don’t support the business model you need)? Do the features leave room for your company to grow?
• Does their pricing model allow you to get all features for one price, or will you have to pay extra for the features you need? Will the price be sustainably cost effective long term, as your company grows?
• Does the software offer seamless integration with other software you use?
• Is the software user friendly? 

Next, we cover five Stripe competitors for companies selling physical goods and services to help you get started with your search. 

Square: Popular Payment Platform for Startups

Square is a popular point-of-sale solution for companies of all sizes. With Square, you can accept payments from your online store, in-person, or via social media. Beyond payment processing, Square also offers solutions for: 

• Virtual terminals (so you can accept credit card payments using your computer).
• Business management.
• Customer engagement.
• Banking (including merchant accounts, savings accounts, and loans).
• Team management (including payroll, time off, etc.).
• And more.

PayPal for Business: Available on Major Ecommerce Platforms 

PayPal is a well-known digital wallet for personal online payments; however, they also offer payment processing for both online and brick-and-mortar businesses. PayPal supports debit card and credit card processing in store or from your online business.

(Digital-first businesses using FastSpring can also process payments using PayPal.)

PayPal for Business also includes: 

• QR code and POS systems.
• Donation tools.
• Built-in integrations with major ecommerce shopping carts (e.g., Shopify, WooCommerce, and more).
• Risk management and chargeback protection.
• Mass payouts.
• And more.

Note: PayPal also has a payments option called PayPal Enterprise Payments (formerly Braintree) that offers your own merchant account.

Authorize.net: For Merchants and Small Businesses

Authorize.net (a Visa solution) is a payment service provider that supports mobile payments, phone payments, and ACH. They also provide a card reader for in-person payments and support online purchases. 

Other features offered by Authorize.net include: 

• Simple checkout button.
• Recurring payments.
• Digital invoicing.
• Advanced fraud detection.
• Optional merchant account bundle.
• And more.

Adyen: Robust Financial Technology Platform

Adyen is an end-to-end solution for payment processing, data, and financial management. In addition to payment processing, Adyen offers features such as: 

• Virtual and physical card creation.
• Tools to optimize traffic in real time.
• Fraud detection.
• Automated dunning.
• Business bank accounts for your users.
• And more.

Amazon Pay: Payment Service and Order Fulfillment

Amazon Pay lets your customers use the payment information already stored in their Amazon account on your website. You can use Amazon Pay as a stand-alone payment solution without becoming an Amazon Marketplaces seller — or you can easily use Amazon Pay on your own website and become an Amazon merchant (which gives you the option for fulfillment by Amazon).

Amazon Pay includes: 

• Optimized checkout flow (modeled after Amazon’s own).
• Co-marketing campaigns.
• Self-service reporting dashboard.
• Fraud protection.
• Easy integration tools.
• And more.

Note: With FastSpring, your customers can pay using Amazon Pay and many other payment methods. 

Need a Stripe Alternative for Your SaaS, Software, Video Game, Mobile App, or Other Digital Product?

Let FastSpring help!

FastSpring lets you manage every aspect of global payments from one platform — without managing tons of different software solutions. We shoulder the liability for online transactions and take the lead on VAT and sales tax management, regulatory compliance across the globe, and much more for you. 

If you’re looking for a Stripe alternative to help you grow your business internationally, we can help. FastSpring provides an all-in-one payment platform for SaaS, software, video games, mobile apps, and other digital products businesses, including VAT and sales tax management, payment localization, and consumer support. Interested? Set up a demo or try it out for yourself.

This post was originally published in January 2023 and has been updated.

The post Stripe Alternatives for 2025: In-Depth Guide and 8 Options appeared first on FastSpring.

Today, oeksound is a global software company in the audio and video space, with their plugins used by some hugely recognizable names in the music industry.

To learn more about how they did it, listen for the full insights into:

• How oeksound’s pricing and trial options make their products more accessible to more users.
• Why the user experience and user feedback is so important for improving and marketing plugins.
• Why a frictionless purchase process is such a key focus for oeksound to continue expanding their sales.

To hear all this and more about oeksound’s experience with taking their plugin business global, listen or watch now!

Jump to video.  |  Jump to transcript.

Podcast Full Interview: Audio

Listen online or find it on more podcast services.

Podcast Full Interview: Video

The post EP30: How oeksound Took Their Audio Plugins Business Global appeared first on FastSpring.

Once a single Black Friday shopping day, deals expanded to encompass the following Cyber Monday, with the entire weekend now referred to as Cyber Weekend. And between the Cyber Weekend halo effect, major global holidays, and end-of-year budget spends, sales in November and Q4 are stronger than other times of the year.

That creates a lot of opportunity for your SaaS or software business to optimize sales opportunities during this profitable weekend, month, and quarter. 

Because FastSpring is a merchant of record for over 3500 companies that use our platform daily, we can analyze aggregate sales data for benchmarking insights into Q4 for your SaaS or software business.

We’ve updated this annual report with: 

• Up-to-date U.S. trends in year-end SaaS and software sales data.
• Up-to-date global trends in year-end SaaS and software sales data. 
• How FastSpring can help you take advantage of those Q4 sales lifts.

FastSpring is a merchant of record that can help you easily grow your business internationally. We provide an all-in-one payment platform for SaaS, software, video game, and other digital product businesses, including VAT and sales tax management, payment localization, and award-winning consumer support. Set up a demo or try it out for yourself.

Our Data Sources and Analysis Methodology

Where: Like last year’s Cyber Weekend data report, even though we help over 3500 companies to sell digital goods in over 200 countries and territories, we’ve pulled sales data from eight countries around the world to help us narrow it down a little. Those countries are the U.S., Canada, Germany, Great Britain, India, Brazil, Australia, and China. 

Note that the data below are specific to where the sales took place, not where the companies are located.

Besides the global data, we also highlight the trends just for the U.S., since it is a large, single market that SaaS and software companies often target. 

When: Using aggregated data from the most current five calendar years helps us show insightful trends while avoiding any major outliers skewing the data unnecessarily. The data below come from 2019-2023, and we use a seasonal index to highlight each month’s or quarter’s sales against the year’s monthly or quarterly average (more on that below).

What: While FastSpring supports the sales of many different digital products including SaaS, software, digital downloads, video games, and mobile games, we’ve limited this data only to SaaS and software sales to keep it applicable to a specific industry and avoid being so broad that it isn’t helpful.

The figures shown were also all calculated in U.S. dollars for simplicity’s sake.

How: First, we calculated a monthly or quarterly average for each year. For example, four quarterly totals of $100, $200, $300, and $200 would average to a quarterly average for that year of $200. So $200 would be our baseline of 100%

Then we compared each month or quarter’s actuals to that year’s average to get a percentage. For example, if Q1 shows a percentage of 90%, that means it is 10% lower in sales compared to the quarterly average. If Q2 shows a percentage of 111%, that means its sales are 11% higher than the quarterly average. 

That data was then combined to get the five-year averages and help smooth out any stark outliers. 

US Year-End Trends for SaaS and Software Purchases

Here are the monthly and quarterly averages for U.S. software and SaaS by month and quarter.

5YR Average US SaaS and Software Sales by Month

Months that stand out as particularly higher than the monthly average include March and October (tied for third place) at 2% higher, December at 7% higher, and November highest at 12% over the monthly average.

5YR Average US SaaS and Software Sales by Quarter

After seeing the monthly averages above, the quarterly averages offer no big surprises — Q4 comes in at 7% higher than the quarterly average.

Global Year-End Trends for SaaS and Software Purchases

Global trends see even stronger rises in seasonal sales of SaaS and software.

Here’s how late-year numbers fluctuated across the globe when including data from the U.S., Canada, Germany, Great Britain, India, Brazil, Australia, and China. 

5YR Average Global SaaS and Software Sales by Month

Compared to U.S. numbers, global October sales at 3% above the monthly average and December sales at 6% above the monthly average are fairly expected. 

However, November saw a much larger bump in global SaaS and software sales against the monthly average, coming in 18% higher. 

Black Friday (and subsequently, Cyber Week) was originally anchored to the U.S. Thanksgiving holiday and may still seem very U.S.-focused. The SaaS and software sales data, however, show that the November sales surge is even stronger outside the U.S. for the other seven countries included in this study, with that 18% rise over the monthly average growing to 29%  when the U.S. is removed. (More on individual countries below.)

5YR Average Global SaaS and Software Sales by Quarter

Global SaaS and software sales in Q4 were 9% higher than the quarterly average.

So while November global sales were particularly high for that month, the Q4 average doesn’t show as high of a peak, indicating that November is a particularly key month for SaaS and software companies to capitalize on.

5YR Average SaaS and Software Sales by Month per Country

To further show why sales show a much higher peak in November globally than just in the U.S., we’ve broken out the monthly averages across the eight countries we included for our global tallies. 

Here’s what monthly software sales fluctuations look like with five years of data for the United States (US), Canada (CA), Germany (DE), Great Britain (GB), India (IN), Brazil (BR), Australia (AU), and China (CN).

Spikes in China in April and June are likely due to the 418 (April 18) and 618 (June 18) shopping holidays, but as you can see, all countries in our list see a large spike in November — the highest month for all eight countries measured. 

Germany and China especially see high spikes in November, indicating that they may be particularly good geos to target for promotions that month as China observes Singles Day on November 11 and Germany observes Black Friday and Cyber Week.

This reinforces that November and Q4 are SaaS and software sales opportunity windows you can’t afford to miss out on. Take advantage of the selling season with:

• Custom coupon codes for partners to promote.
• Email promotions.
• Upsell or bundle offers.
• Social media campaigns.
• Localized promotions for targeted regions.
• Any other offers that might appeal to your target customers in your target regions.

How FastSpring Can Help

Companies already using FastSpring (such as Stardock and TestDome) recognize FastSpring as a true partner to their SaaS and software businesses.

Here are just a few of the reasons FastSpring makes it easy to sell globally in the right places, in the right ways, and at the right times — such as over Black Friday, Cyber Monday, and beyond. 

FastSpring Makes Global Payments for You and Your Customers

It isn’t enough to just make your product available for sale in more countries — customers need to be able to purchase with a localized checkout experience that makes them feel comfortable buying. That includes automatic conversions to local languages and currencies as well as offering dozens of the most popular payment methods, which vary by region.

Learn more about FastSpring’s global payments.

FastSpring Handles Global Taxes, From Calculating to Collecting to Remitting

Because FastSpring is a merchant of record, we don’t just facilitate payments — we actually become the entity selling the product. That means we also become the entity worrying about card brand rules, regulatory rules in many geographies, risk and fraud, and even taxes. 

Our team of tax experts stays up to date on global tax regulations so FastSpring can calculate, collect, and remit taxes without you needing to worry about it. 

Learn more about FastSpring’s global tax management. 

FastSpring Supports You and Your Customers

FastSpring doesn’t just offer award-winning support to companies that use us as their merchant of record — we also handle consumer support for your customers.

Consumers can submit an online request to get personalized assistance, or they can reference our helpful support topics such as Checkout and Purchasing, Licenses and Downloads, and more.

Need assistance with your FastSpring store? You can submit a request from within the FastSpring app, or visit our support page. 

Read more about our Stevie® award, our Globee® award, or submit a seller or consumer support request.

Get Started With FastSpring

FastSpring is the leading full-stack merchant of record service for growth-stage SaaS and software businesses. Our platform serves as an all-in-one payment platform that handles everything from payment and checkout localization, to sales and VAT tax management, to customer support for end consumers, and so much more.

Learn more about how FastSpring can help you grow your business globally: Set up a demo or try it out for yourself.

The post Cyber Weekend Benchmarking Data: 2024 SaaS and Software Holiday Spend Report appeared first on FastSpring.

Are you a Digital River customer in emergency need of a new payment and subscription provider ASAP? Click here — our team of specialists is standing by, and requests are prioritized and routed by geo to ensure you have a fast, smooth experience.

There are a lot of Digital River alternatives on the market, and you may not know what makes any of them stand out in particular. 

It’s especially important to note that Digital River is a merchant of record (MoR), which means that many payment service providers may not include the kind of comprehensive services you’re used to with an MoR. 

In this post, we cover: 

• What a merchant of record is, and why it’s so important to make sure your MoR-level service isn’t disrupted if you’re thinking of switching providers.
• Why FastSpring is an excellent Digital River alternative.
• Three other payments options in 2024.

FastSpring handles the entire payment process from checkout to remitting end-of-year taxes for SaaS companies. To learn more about how FastSpring can help you scale quickly, sign up for a free account or request a demo today.

Why the Best Digital River Alternative Is a Merchant of Record

If you’re familiar with Digital River but aren’t familiar with the term “merchant of record,”  you might not be familiar with exactly how many benefits come with using one. 

Here’s a refresher on what an MoR is and why — if your business is currently using one to monetize your SaaS, software, or other digital product — you probably want to ensure you keep using one.

What Is a Merchant of Record?

A merchant of record (MoR) is the entity that actually sells the goods and services to the customer. Companies can serve as their own MoR, but many opt to outsource that responsibility to a company like Digital River or FastSpring to sell goods and services on their behalf.

The MoR takes on the liability of SaaS transactions for you, meaning they handle everything from payment processing, to chargeback management, to collection and remittance of taxes, and even compliance with local laws and regulations. And because the MoR is liable for issues in those areas, they handle resolving those issues so you don’t have to. 

Digital-commerce-reliant businesses that utilize an MoR can focus less on ecommerce and more on making great software, SaaS, video games, mobile games, or other digital goods. 

What Makes a Merchant of Record Different From Payment Service Providers?

Payment service providers (PSPs), like MoRs, serve as a bridge between businesses that want to sell a product, and the specialized networks and services that are needed on the back end to make those transactions happen. Those specialized networks and services may include payment gateways, payment processing, a merchant account to accept debit and credit card payments, and others.

PSPs usually also include some sort of ecommerce platform and/or integration functionality (such as APIs, plugins, special integrations, etc.) to integrate their payments platform or checkout with your online store or website, but options will vary.

However, payment service providers usually stop short of managing risk, handling taxes, and assisting with chargebacks. If rules and regulations change in any of the regions or countries where you sell your product, you’d be responsible for keeping track of those changes and updating your PSP processes and checkout accordingly. 

Some PSPs may offer upgradeable payment solutions to get their services closer to those that an MoR includes automatically, but they are often bolt-on features, and they will come with upgrade fees. For example, Stripe has a fraud prevention upgrade called Radar, but it comes with additional costs per transaction fees.

Grow With FastSpring, an Experienced Merchant of Record

FastSpring is the leading merchant of record for global software companies, powering over a billion dollars in worldwide transactions every year.

Here are just a few of the reasons we’ve earned that reputation.

We Have Decades of Experience

Founded in 2005, FastSpring has two decades of experience with enabling global payments, and we’ve been a part of the SaaS landscape as it has grown. 

Because of this, our team deeply understands the complexities of selling digital goods and software, including subscription management and all of the nuanced needs that come with it.

We’re Backed by Great Investors

You don’t need to worry about FastSpring being profitable or reliable. Along with our experience, we also offer the peace of mind that comes with being backed by a top-performing, highly reputable investment firm. 

Thanks to Accel-KKR, FastSpring has the resources and proceeds needed to help scale your business with online payments, while providing excellent corporate, privacy, and security governance.

We Grow When You Grow

Our many years in the global payments platform industry has also enabled FastSpring to grow over time — but that growth has only happened because of our great customers. 

That’s for two reasons: because we work on a revenue-sharing model, and because we’re a partner who wants to help you continue growing.

1. FastSpring Makes Money When You Make Money

Thanks to FastSpring’s revenue sharing model, we make money when you do. When your buyer makes a purchase, we charge a small commission fee on that transaction.

That means that if you’re not transacting, we’re not charging that commission.

Our team will work with you to determine simple, flat-rate pricing based on your volume of business and transaction time, and that pricing includes all of our platform’s features and tools. 

Learn more about FastSpring’s pricing here, or request a meeting to discuss more details. 

2. FastSpring Wants to Be Your Partner, Not Just Your Payments Solution

Stardock was able to make the transition to SaaS subscriptions thanks to FastSpring’s ready-to-use existing subscription infrastructure, but they saw the mutual investments that we were putting back into our own platform to continue developing new features and products. 

This made Brad Sams of Stardock feel secure in Stardock’s partnership with FastSpring, because he could see we were in it for the long haul. “Because the better we do, the better FastSpring is going to do. We’ve got to make sure that everybody’s winning, and things with FastSpring just felt aligned.”

“FastSpring was on that path of continued investment and wasn’t just collecting the paycheck every month and doing nothing.”

– Brad Sams, Stardock

Read more about Stardock’s experience with FastSpring here.

TestDome has also been very happy with FastSpring’s support, noting that it goes from assistance with buyer issues and chargebacks all the way up to the top of the company and our CEO. 

TestDome CEO and co-founder Mario Zivic is happy to have been using FastSpring for a decade, saying that FastSpring has been the clear and easy choice for their merchant of record needs. 

Besides more common support for buyer issues like chargebacks, credit card issues, and refund requests, Mario even received an offer of advice from FastSpring’s CEO. That resulted in a personal phone call and “an extremely valuable piece of advice,” noting that he has seen firsthand that “the willingness to help and support was not limited to Support — it went all the way up to the CEO.”

Read more of TestDome’s story about our partnership.

Award-Winning Customer Support and Customer Success

The high level of support and service has not only been recognized by our customers — it has also been recognized in our industry. 

In April of this year, FastSpring’s support team won a Silver Stevie® award for Front-Line Customer Service Team of the Year in the “Technology Industries – Computer Software” category.

Then in June, FastSpring’s customer success team won a gold Globee® award for Customer Excellence in the “Achievement in Team Customer Success” category.

We don’t just say we want to be a partner — we set out to prove it. 

Our Hands-On Migration Team Strives for Your Success

FastSpring support isn’t only there for you after you’ve onboarded — we want to ensure you get up and running on our payments platform as quickly and easily as possible.

Our implementation team of hands-on, highly efficient sales engineers are experts in FastSpring’s pre-built web storefront solution, the flexible and extensive FastSpring API, webhook features, and more. They’re there to help you make a seamless transition through migration and integration. 

FastSpring has powerful integrations with best-in-class third-party solutions, including WordPress, Zapier, and multiple Google services. Learn more about FastSpring integrations here. 

Other Great FastSpring Features

Here are a few more great reasons to use FastSpring: 

• You’ll automatically be compliant with sales tax, VAT, and privacy regulations around the world.
• FastSpring accepts the top payment methods in 200+ regions across the globe with 23+ currencies and in 21+ languages.
• You can customize seamless embedded or modal popup checkout experiences on your website.
• We make it easy to offer coupons, discounts, and dynamic price points for promotions.
• Checkout can be streamlined to a single click with 1ClickPay.
• Strong documentation that includes AI-powered search for precise, relevant responses in real time.
• And so much more!

To learn more, check out our product overview, or sign up to check out our platform yourself. Want personalized answers? Request a demo with one of our experts.

3 More Digital River Alternatives

The following options are common alternatives you might look at if you’re assessing Digital River competitors. Keep in mind that none of the below options are merchants of record, so you may need to supplement their services, either internally or with additional vendors and services.

Stripe

Stripe is a well-known payment processor that allows businesses to accept debit cards, credit cards, and mobile payments, with features such as:

• Payment processing.
• A customizable UI and pre-built checkout flows.
• Simple subscription management.
• Online invoicing.

You may be wondering if it’s an option for your business simply because it’s so ubiquitous, and it may appear at first to have lower pricing than the merchant of record you’re currently using. But that’s because Stripe isn’t a merchant of record. 

If you’re looking to lower your transaction costs and you have the scale, expertise, time, and teams to support the many services you’ll be losing by switching from an MoR to Stripe, this may be a good option for your business. But you’ll need to make up the difference in services lost, including tax compliance, fraud management, and more. Stripe does offer products to cover some of those needs, but they are add-ons that will increase your overall cost — so any initial cost savings might quickly disappear.

However, if you want to switch from Digital River to a business in the same category with the features and peace of mind an MoR provides, Stripe probably isn’t the right Digital River competitor for you.

Adyen

Adyen bills itself as an “end-to-end payments, data, and financial management in a single solution.” Its payment solutions and financial services include features and products such as:

• In-person and online payments in one system.
• Revenue optimization with intelligent payment routing to improve conversion rates.
• Subscription management features like dunning automation.
• Risk management with fraud detection and prevention.

While Adyen has some of the features a merchant of record offers, you will still need to manage your own company accounts and merchant accounts.

PayPal for Business

PayPal is a well-known digital wallet for personal online payments, but they also offer a payment processing option for small business. PayPal for Business is both an in-person and ecommerce solution.

(SaaS companies using FastSpring can also process payments using PayPal.)

Other features of PayPal for Business include but are not limited to: 

• Built-in integrations with major online shopping carts (such as Shopify). 
• QR code and POS systems.
• Invoicing.
• Chargeback protection (only available for business accounts with Advanced Credit and Debit Card checkout).

Besides PayPal for Business, PayPal also has a payment processor specifically for SaaS called Braintree.

How FastSpring Can Help

Need a merchant of record to help you grow your business internationally? FastSpring is a full-stack, all-in-one payment solution for SaaS, software, video games, and other digital product businesses. 

Our services include VAT and sales tax calculation, collection, and remittance; payment localization; regulation compliance; award winning consumer support; and so much more! 

Sign up for a free account or request a demo today.

Other Articles You Might Be Interested In

• 2Checkout vs. Stripe vs. FastSpring: Comparing Payments, Taxes, and Platform Features (+ Pricing)
• Stripe Alternatives for 2024: In-Depth Guide and 8 Options
• International Payment Gateways: An In-Depth Guide and 10 Payments Options

The post Digital River Alternatives for 2024 appeared first on FastSpring.

In this episode of Growth Stage, we interview affiliate marketing veteran and attribution animal Adam Riemer of Adam Riemer Marketing about his thoughts on: 

• What proper affiliate marketing looks like.
• How to weed out fraudsters & shady attribution affiliates.
• How to go about recruiting the RIGHT affiliates to help drive meaningful growth in your business.

If you’ve set up an affiliate program and don’t know what to do next, or you’re looking for tips on how to tame your existing affiliate program, don’t miss this episode of Growth Stage. Listen or watch now!

Are you looking for a merchant of record that will help you grow your subscription software business? FastSpring provides an all-in-one payment platform for SaaS, software, video game, and other digital goods businesses, including software management, VAT and sales tax management, global payments, and consumer support. Set up a demo or try it out for yourself.

Jump to video.  |  Jump to transcript.

Podcast Full Interview: Audio

Listen online or find it on more podcast services.

Podcast Full Interview: Video

Transcript

David Vogelpohl (00:04)

Hello everyone and welcome to Growth Stage, a podcast by FastSpring where we discuss how digital product companies grow revenue, build meaningful products, and increase the value of their business. I’m your host, David Vogelpohl. I support the digital product community as part of my role at FastSpring. And I love to bring the best of the community to you here on the Growth Stage podcast. In today’s episode, I’m really excited for this topic.

It was a bit of conversation in a Slack community I’m part of and really wanted to bring this topic live here on the podcast. We’re going to be talking about advanced affiliate marketing for SaaS software and digital product companies specifically and joining us for that conversation. I’m proud to bring to Growth Stage Mr. Adam Riemer. Adam, welcome to Growth Stage.

Adam Riemer (00:56)

Hey Dave, thanks for having me.

David Vogelpohl (00:58)

Awesome. So glad to have you here. And of course, I’ve known you for forever and a day and really looking forward to picking your brain here to talk about advanced strategies for digital product companies. And for those watching and listening, Adam is a digital marketing and affiliate marketing veteran. He’s an attribution animal. He’s really well known for proper attribution models and putting value in commissions where value are due.

and he’s going to share his thoughts on what proper affiliate marketing looks like, how to weed out fraudsters and shady affiliates and how to go about recruiting the right affiliates to help drive meaningful growth in your business. So Adam, I know these are topics that a lot of folks are interested in. And so I’m really excited to have you here. So Adam, I’m going to ask you the first question I ask every guest on Growth Stage.

What was the first thing you bought online?

Adam Riemer (02:01)

I remember. So it was in, I think, 1999 or 2000. I heard a record at a nightclub in Pittsburgh that I really liked and I’d already started DJing. And they told me it was only available from one store. And that store happened to be in the Netherlands called Dance Grooves. And so I had to order the LP to be shipped overseas, like…

I think I was still on an AOL connection and I actually ordered the first thing I purchased was a vinyl record to spin Adorave from Dance Grooves. I thought I was going to be a CD but no, that was the first purchase I had ever actually made.

David Vogelpohl (02:45)

It’s actually been a bit of a theme of people have answered this question as I’ve asked it, is it like that extreme need for something and only being able to get it online? That sounds really interesting. So how long was it after that roughly before you bought music directly, like a digital song?

Adam Riemer (03:08)

I didn’t really have digital back then because iPods weren’t out yet and neither were the… iPod was the first one, yeah, and then it became the iPhone. So yeah, it was a long time before. I was still burning CDs and everything. The first digital product I bought probably wasn’t until the last 15 years.

David Vogelpohl (03:21)

Nice.

Okay, makes sense.

Adam Riemer (03:30)

I just, I really like holding books. I really like, I don’t know, I liked having the movie collection. Now I’ve switched. I prefer my movies to just be a couple of clicks away, but I still love books. Like I don’t find the same pleasure out of an reader that I do holding the actual book, flipping the page, going into the bookstore. I love that. I do shop for books online a lot, especially if I’m on the road and I rip through one, I need the next one delivered. It makes it easier to go online, but I really like holding books.

David Vogelpohl (03:59)

Nice. I was wondering if you could tell us a little bit about Adam Riemer Marketing and what you do there. And I’m going to go out on a limb and guess you’re the owner and CEO or something like that. Is that right, Adam?

Adam Riemer (04:12)

Yeah, at least for now.

I need to find somebody that can actually manage it for me so I can do the things that I love, which is the marketing and working with my team where I fall flat is working with the clients because I, as you said, I tend to be a little bit hard headed and I get a bit passionate and that’s not always a good thing. It’s a good thing that I’m passionate about the work, but not always for the clients. So what we specialize in what our strengths are is conversion rate optimization, top funnel and value adding affiliate programs.

SEO work as well as content marketing and strategy. We do help companies with their lifecycle marketing which includes email and win back and at different stages in the customer journey what are their needs now and how do you develop and that includes consumer products as well as B2B, lead gen and the service space.

David Vogelpohl (05:03)

Excellent. So kind of a full service digital marketing agency, if you will. And I heard you mentioned as part of that value added affiliate marketing. And so this is kind of a nice segue into my first question on the topic of this podcast, which is what does value added or proper affiliate marketing mean to you? What defines that?

Adam Riemer (05:29)

So the way that we define value adding is would the sale have occurred without the affiliate touch point? Did the affiliate touch point actually have some form of financial gain or does it create a financial loss or is it a neutral financial touch point?

So an example of that would be if all of the sales are happening at the very end of the sale and the transaction, somebody’s just looking for a coupon code, if you removed them from the affiliate program, would that consumer still come through and would they be coming through your funnel and converting at the same rate? If the answer is yes, which most of the time it turns out to be yes, it’s a no value affiliate and you’re probably taking a financial hit.

if that same affiliate also has top funnel traffic suppose you sell t -shirts or suppose you’re a CRM software company and you are showing up from an influencer that does show up for the coupon phrase but also has a lot of traffic coming in from their YouTube channel around the best CRM systems how to optimize your sales funnels and they’re funneling off of that traffic that you cannot reach on your own at that point you have to test is the top

funnel more profitable than the bottom funnel and by allowing that bottom funnel and am I chasing away smaller partners that know they’re going to lose some sales to that.

So it’s a really fine tuned game of cat and mouse, but it’s easy to track. The one thing you’re going to run into is nobody has your best interests in mind as a business owner or as a marketing team. The networks make money off of the actual touch point and conversions that come through their network by allowing this to happen and saying, well, it’s part of the customer journey. They make more money. So they’re going to be encouraging you to work with some of these bad behaviors, use your data and understand how it goes.

One other touch point is a review.

A review does add value and a review can help convince a customer to convert with you over another, same with comparisons. But what happens if you would use an ambassador instead of an affiliate and you would help that ambassador optimize for your terms? That ambassador now shows up for your brand press review. You have to pay a one -time fee and a one -time fee only. You no longer pay commissions every single time a customer’s in the review. You have to pay an upfront cost.

But in the long run, you save a lot of money because you’re no longer paying commissions over and over and over. And now you have the chance for a full value add in top funnel affiliate program.

David Vogelpohl (08:03)

So as I think of folks that are running digital product businesses like SaaS and software, it’s a lot of companies that are 50-, 100-person teams or less. And so they look at affiliate marketing from the outside, and they see this complexity, and they see this need for audits and this need to be picky with who they partner with. And I really like how you simplified it in that statement when you said,

Would the sale have occurred without the affiliate touch point? And you gave a variety of examples there, and I love extremes for a minute. So a really bad affiliate would be maybe someone with malware that’s stuffing cookies in browsers. So that would, that sale would have occurred if that bad actor had not have done that. So that’s an example of someone doing something really bad. And then you were talking about some gray zones a little bit where.

You had maybe a coupon site that was primarily, you know, getting their sales at the end of the sale. And then you were talking, I think about comparison and review sites a little bit where maybe it’s a little bit more in the middle of the decision process. But I like that litmus test of would the sale have occurred without the affiliate touch point. And I guess where your point is, is if the answer is no, then this is where it falls outside the realm of proper.

But when the answer is yes or maybe, how do you think about that blended value? Is it like all commissions are none or do you think about splitting it up or maybe weighting it based on the level of value that you think affiliate’s driving?

Adam Riemer (09:44)

I’d definitely lower the commission if it’s a lower value touch point. And that’s a proper thing to do. It’s the same as when you’re going with lifetime commissions on recurring. What if the person promoted you for a year and then decided to stop should they still be getting paid six and seven years later when they’re promoting competitors. That’s up to you to update your program terms and conditions and make it very clear.

you could add in a clause that says if you stop promoting us and haven’t driven new customers within a year, we’re going to turn off the lifetime commissions.

we’re looking for long term relationships and stability, not one and done referrals to friends where you make money forever. This is a partnership relationship. So it’s up to you to determine. You could set up attribution lines where if there’s a top funnel click and a mid funnel click, you give the top funnel 75% in the mid funnel 25% of the sale and that’s going to split it nicely for you. But if that top funnel has room to grow and someone else comes along and offers them more money and has an

equal average order value and has an equal type of commission, they’re going to be more profitable. So you’re going to lose that top funnel partner. So you have to tread lightly. You have to make exceptions. If it’s a no value, low value, I just say kick them out. Why lose money? You could be actually profitable with your PPC campaigns. For example, there’s a keyword that’s sometimes profitable, sometimes not. Track the low value conversions to see if there’s a PPC click too. We just had this happen.

Turned out if we remove those low value and no value partners, PPC became profitable and we could reinvest that money into the profitable keywords.

David Vogelpohl (11:23)

Okay, so really focusing both on the attractiveness to the right affiliates and then leveraging your budget where it’s most profitable for you relative to the affiliates, especially you’re spending your time on. So again, if I’m a smaller company operating an affiliate program, I guess I’m gonna wanna be really choosy about who I let into it and think about their role in the funnel.

and how much I want to reward that. And then you also kind of brought up, well, there’s other people trying to get those rankings or the spots on those affiliates web pages as well. And so I got to think about that competitive aspect of it. Okay, so we’ve talked about affiliates that can cause problems, affiliates that do very bad things like cookie stuffing or affiliates that just don’t provide a lot of value. So what type of affiliates do you like focusing on recruiting?

Which ones do you want to sign up for your program or which ones do you help your clients actively reach out to recruit?

Adam Riemer (12:27)

So we go after the evergreen ones first, ones that have the ability to show up inside a YouTube search result, inside a Google search result, or a long-term social media channel with a relevant audience. By that I mean Pinterest has a different audience than TikTok, than Facebook, than Instagram. And so if your audience isn’t there, who cares if they have a million followers, you’re not going to reach them. So we go after the ones that have the long-term reach.

a webpage or a YouTube video has the opportunity to drive traffic for a few years versus an Instagram post which might last for a few days. By building the program first with evergreen copy or recruiting insights that are topically relevant and able to show up for those phrases, we’re building a nice foundation. After that, we go after the short-term boosts.

So that would be your influencers, your Instagramers, your LinkedIn people, because a LinkedIn post with a new algorithm could last for a few months. We recruit them and we line up posts about the right times a year, like right before busy season, during busy season, or at slow seasons where they may be able to influence a boost in sales. And that way we can constantly try to hit our numbers. It takes a long time to do because you have to recruit, then you have to get them to sign up, then you have to get them to agree.

Once the content’s created, for example, with the evergreen, you have to then hope it actually shows up in the search engines. Once it does, you have to hope the readers click to your link and then you have to apply your conversion rate. So after all of that, if you have a 5 % conversion rate, you have to wait till 20 unique visitors have clicked through to even have the chance at a first sale. So it’s a very, very long-term thing.

David Vogelpohl (14:08)

Makes sense on the long game. If I boil that down, thinking about the types of affiliates you were talking about going after, it really sounded like it boiled down to people publishing content. And obviously, people publishing content that’s relevant to a recommendation for a particular type of product.

The word affiliate is a big word. Matter of fact, in a lot of affiliate networks, they’re called publishers. But affiliates can take different flavors. With SaaS software and digital product companies, do you find that there are technology partners that use affiliate marketing to refer customers for products that might be symbiotic? Like maybe I have an SEO product that I’m going to recommend some email marketing product as part of my flow. Is that the other, do you look at?

recruiting those types of affiliates as well.

Adam Riemer (15:04)

Yes, anyone that has a relevant audience could be an affiliate. So I’ll give you a few examples. Some of our B2B clients have perks portals and you’ll find affiliate links in there. Other times when I’m speaking of conferences, I’ll disclose that this is an affiliate link and I’ll put up a QR code or a URL on the screen so people can do it and they can follow, people can click,

start a trial and have an experience because the tool or the software is relevant to the presentation or the workshop I’m giving and the way to get that exposure is to have me as a customer and as an affiliate. Others do a loyalty and rewards program with a cross promotion so there’s a lot of different ways you can do it. There’s also email blasts with complimentary companies. You just want to make sure that open rates are a very skewed and incorrect metric. You want the actual click -throughs and conversion rates.

just like an influencer. They only have influence if people are taking actions. The action you’re most interested in as an affiliate is taking out their wallets.

David Vogelpohl (16:01)

I like it. I like it. One of my favorite sayings is sort by conversions. And it sounds like you share that sentiment on some level. So when we talk about recruiting, I think there’s like the idea of like, where do you get a list to recruit from? And how do you go about that? One of my favorite approaches whenever I take over an affiliate program is to look at the short tail keywords that we’re bidding on and search and just see who ranks for them for like a list.

But what do you recommend? How do people start to build a list of affiliates to recruit? And then how do they go about organizing and pulling all that off? They’re using CRM’s help me understand how you like to approach that.

Adam Riemer (16:46)

So what we do is we will use that same PPC data and SEO data because if you already have the top ranking, what are the rankings below you? Anyone that’s a publisher is a potential affiliate and we know that the conversion rate is high. That gives us the ability to create a forecast. If you add us in here, the potential income you could be making over your CPM ads on the publisher site is X, Y, and Z per month and at that point,

we’ve made a strong case for why they should include our client within that post and the money they could be making.

We use BuzzStream that’s our preferred tool for recruitment and it doesn’t actually do the recruitment on its own although I believe they have something in beta right now but it does give our team own ability to share the messages what’s working what’s not working yes we’ve already reached out to this person so don’t touch them I’m already on it or you can reassign it hey this is better suited to David’s needs and David’s skill set so I’m going to tag and pass it over to them it’s just a really nice funnel and system to cross

remote and track your recruitment efforts.

David Vogelpohl (17:50)

So this sounds like, I mean, it’s effectively a sales process. It’s just what you’re effectively selling as a partnership for the revenue for the affiliate, revenue share of the affiliate commissions. Is that a good way to think about affiliate recruiting? Is that it’s very similar to a sales process with like an account management backend or how do you think about that?

Adam Riemer (18:10)

Yeah, unlike a backlink for SEO where you just need the link to your website, with affiliate, you have to get that link and you have to get revenue from it. So it’s all about the relationship. It’s about building trust. It’s about ensuring there’s some form of gain for both companies. It has to be mutually beneficial to work and be copacetic.

David Vogelpohl (18:31)

You know, thinking about using SEO and targeted keyword data to discover affiliates, are there any other, like do you use like Ahrefs looking for like backlinks or how do you, what are some other discovery methods for like affiliate recruiting lists?

Adam Riemer (18:45)

So I personally don’t use Ahrefs, it’s a good tool. The services that they offered, they canceled, they lost their license or something. So I closed my account down years ago, but I know a lot of people that love them and I have a couple of clients that love them. So I wouldn’t count them out. I actually use SEMrush, which is their biggest competitor,

for a lot of tracking and data and discovery. But if you want for specifically SEO style at— affiliates, Majestic is going to be your good one to go to. And I don’t use Majestic, but I do highly recommend them for this. And what you can do with Majestic is you can plug in your competitors affiliate link style, as long as the merchant ID is first in the path. And you can actually find out exactly who’s promoting you and generate a list because it’s the same thing as a backlink profile.

David Vogelpohl (19:16)

Yeah

Adam Riemer (19:34)

which is just all of the links that the database can find and Majestic has the largest in the world.

You can also go in and find citations, mentions of the competitor’s name and then you can do is this on an .edu site, is this on a major media site, and you can funnel through there and figure out where they’re being mentioned with a direct backlink that helps their SEO. By replacing those backlinks with affiliate links, one you’re causing damage to your competitor’s SEO making it easier for you to climb and replace them in the search engines, AND you’re taking the traffic they were getting for free and

you are now getting that traffic. The benefit to the person that was featuring them is they can make money whereas they were losing money previously by sending the traffic for free. So it’s a really compelling place and it crosses multiple channels. If you do get onto the major media and you haven’t been featured before there’s a chance you can now feature that logo in your PR bar which is a trust builder for consumers and may help increase your conversion rates. So affiliate has an impact on multiple channels as long as you’re doing it smart.

David Vogelpohl (20:42)

Awesome. That sounds like some good recruitment and list building tips. I know that that’s a deep well to draw from, and it’s interesting how many opportunities there are to surface when you’re going deep on affiliate recruitment. You talked before about types of affiliates that you like to keep out of the program, those that don’t add a lot of, you know,

I guess value at the bottom of the funnel or to the transaction, would it happen without their presence kind of thing? So if you put yourself in the shoes of, you know, an SMB technology company and they wanted to keep it lean and mean in the beginning, what sort of affiliates would you recommend they say, you know, no, or not now to?

Adam Riemer (21:33)

I would avoid the review sites first and I would look at the types. I would go for complimentary companies. That’s the first one. Number two, look for the people in that space that have email lists and try to get a quarterly blast or a feature. You may have to start with a media buy at first and then when you see the conversions that come through, like look, if you became an affiliate, you would have had this many conversions.

Now you have to remember one thing, an email list is the same email list. It’s constantly growing, which is good, but these people had already seen your business before, so the results may be smaller each time you do it. At the same time, there’s a certain amount of touch points that have to happen in between. So that would be a really good one. And then look at the YouTubers, especially in the SMB and SaaS space, because they have the opportunity to rank in Google search as well as on YouTube. And a lot of people are looking for solutions and a visual and verbal queue

is a really good way to learn how to do something whether it’s a B2B software system enterprise or small business or even fixing something in your house. Having that visual builds the trust and shows you what it’s going to be like to use if it’s going to be adoptable and adaptable to your clients teams and then if you are the one being demonstrated in the video it builds the trust that your software really is a solution.

David Vogelpohl (22:53)

Adam in that response you had mentioned avoiding review sites in the beginning and I feel like many of the technology product companies I’ve worked with over the years. It’s like one of the biggest sort affiliates in their niche is like. I don’t know “top 10 X service” in their review sites, but they’re they’re ranking for like

“top provider does X types of queries.” Do you recommend folks avoid that or are you thinking avoid it where they say like I have a review of your brand? The latter?

Adam Riemer (23:28)

 was your company, David, I would say avoid letting people and going after sites that say FastSpring reviews. This is just your own customers. This is just your own traffic that they’re intercepting. If it’s the best software to do X, Y, and Z, that’s something that adds value. It doesn’t have your brand, but it features your brand as a solution. So that’s a touch point that’s going to bring someone to you.

if they also have a review after but that review is maybe 20% of the traffic coming through and that other 80% has a really strong conversion rate then I would say both are fine and keep them just make sure there’s advertising disclosures on the top of each page.

David Vogelpohl (24:08)

Now, yeah, I was going to say on the disclosure side, so like when you when you have these affiliates that are running review sites about your brand and you’re paying commissions and really in any case, you need disclosures that it’s a paid ad, but in particular when you have these types of reviews or assessments, do you have anything else to add on that front? I’m guessing that’s pretty important.

Adam Riemer (24:33)

It’s, I’m not a lawyer. I’m not licensed to give any legal advice in any way, shape or form. So what I’ve been told by different clients and each client has different policies is to just make sure it’s clear, concise, visible, and states exactly what happens. So if the list and if the rankings on the list are based on how much the affiliates making, well,

David Vogelpohl (24:35)

Right here, yeah.

Adam Riemer (24:58)

they need to disclose that. It needs to say the amount we make influences the review and where they are in our list. Just like they have to say, I’m getting paid to feature you. If they were just featuring you on that list out of the kindness of their heart, they weren’t going to make any money in commissions, probably don’t need a disclosure because there’s no compensation. They just genuinely think you’re a good service. But if there’s money, whether it’s free product, a review, a year subscription or a trial account,

that has to be disclosed and before the brand is exposed to the consumer.

David Vogelpohl (25:31)

Yes, so if I if I really like a product and I write a review about it, but I want to make money from the review and I use an affiliate link, I can do that as long as I disclose it effectively on the affiliate side. And then you were also referencing other types of sites where the ranking is based on the revenue. Now, I think a lot of people think that means the commissions that they’re paid by the affiliates. I’m going to pay you $100 to sign up. My competitor is going to pay you $50 to sign up or $200 to sign up.

But it’s more than that, right? It’s it’s like the number they sell and the total amount of commissions they make, not just the amount per unit is, I mean, is this a factor in how they’ll rank the revenue from these review listings?

Adam Riemer (26:17)

Yes, exactly. So most of those listicle sites and most of the media companies, they have an internal EPC, earnings per click, which is separate from a network EPC, which is also a flawed and fake metric. And what happens with their internal earnings per click? They’re taking the amount of money they make, which is a combination of the total people that have clicked through. So if everyone at your company is clicking on those links, you’ve just lowered the earnings per click.

David Vogelpohl (26:30)

Haha.

Adam Riemer (26:44)

if they’re getting one click in a sale each time because it’s a review or a coupon the earnings per click is going to be massively high. So that’s why they break it down by page and if that page is generating a high EPC the algorithm and some of them are now automating this you may see in the morning you’re in the fifth position and in the afternoon you’re in the second position and at night you’re in the tenth position that’s because their algorithm is automatically updating the template and moving these around to where and when they’re most profitable.

And now there’s actually some affordable software out there. I think they’re called a Affilimate. They came across my radar about a year ago and they built one of those tools that the major media companies use for consumers, or not for consumers, but for some of the smaller publishing houses and affiliates. And I was blown away and that takes a lot. I’ve been doing this for 20 years. So they are building something pretty cool and special.

David Vogelpohl (27:14)

So it’s a.

So if you want to get listed, and whether they use that tool or something else, but if you want to get listed on one of these sites, it’s a game, right? It’s your price point, how much in commissions you’re willing to pay, your ability to convert those users, and all of that together results in an amount of money for them. So you might have higher commissions by three times as much, but if you convert less than three times as often, you’ll have a worse deal with somebody paying lower commissions. And so…

Adam Riemer (28:08)

Correct and use, sorry, you said something interesting there which is your price point. Having the lowest price point means lowest commission if you’re not doing flat fee. So having a medium or a competitive price point or being the brand and having really strong branding and a brand presence could cause a similar conversion rate and because you have a higher price point even with an equal commission, if the conversion rate’s the same, you generate a higher EPC for the affiliate.

David Vogelpohl (28:10)

Yeah, go ahead.

Adam Riemer (28:37)

But as a founder and an owner, you have to remember your baby’s not that special and it’s not the prettiest baby out there. So you have to think of it from a consumer standpoint. Does the consumer understand the brand value? And if not, you need to work with your marketing team and your branding team to say, here’s what we could be saying. How do we get the consumers to understand this better? And sometimes it’s to remove the branding and focus on the selling points and the value, which means getting rid of all the fluff and all the buzzwords. That’s something very hard for founders to let go of.

David Vogelpohl (29:08)

Yeah, it’s a good point. Like, “What do you do?” is a pretty simple question that we answer in very complex ways. My last question for you here today is we’ve talked about what running a proper affiliate program looks like. We talked about recruiting, building lists, reaching out.

What when I have an affiliate and they’re part of my program, how do you think about getting them to keep referring customers or to refer more customers? Like how do you think about the management of those relationships?

Adam Riemer (29:43)

I keep notes on every single affiliate inside their affiliate accounts. That way if something ever happens to me or if I stop managing and I have a team member take over, they’ll see exactly what happened and one of those notes is motivators for that partner.

We have some partners that are making 10 and $30 ,000 a month and they don’t care about the money they’re making enough even though a higher commission is always going to be attractive. Sometimes they just want like a nice food treat and that’s when Gold Belly comes in and I’ll ship them something really cool or something fun like there’s one of my favorite gifts to send is the not fried chicken ice cream. It looks like a piece of fried chicken but it’s actually a really good ice cream and the bone inside the chicken drumstick is like a Kit Kat type of

candy. And so things like that. It keeps us in front of them It keeps the goodwill going and then other people are impacted by money. So what you’ll do is you’ll run cash incentives, you’ll run bonuses if you can hit this goal over last year what you did, then we’ll pay you this type of bonus. Some people want recognition and I’ve sent trophies and plaques for them to hang on the wall if they’re a consultant and they— like a divorce lawyer, for example

and they’re sending people in for housing and to get a new house and real estate leads. What we’ll do is we’ll put a top XYZ company partner plaque for them to put on the wall, which builds trust in the brand. And the person may actually start filling it out from their office through their affiliate link. Everyone’s motivated differently and keep track of their motivators cater to those. It’s not a one size fits all, especially in the B2B space.

David Vogelpohl (31:13)

I like it. What a great point to end on. Adam, thank you so much for joining us today. This has been really educational. And as always, I love nerding out with you about affiliate marketing. Of course, of course. If you’d like to learn more about what Adam is up to, you can check him out on LinkedIn or visit adamriemer.me, R-I-E-M-E-R is how you spell Riemer. Thanks everyone for listening to the Growth Stage Podcast.

Adam Riemer (31:24)

Thank you for having me, David.

David Vogelpohl (31:41)

If you’d like to learn more about FastSpring, you can check us out at FastSpring.com. Thanks everybody and have a great day.

The post EP21: Advanced Affiliate Marketing for Saas, Software, and Digital Products appeared first on FastSpring.

Will your existing users revolt to the change and switch to a new product? Will your subscriptions renew at a high enough rate to counteract a reduction in one-time sales? How do you even roll this out?

In this episode of Growth Stage, we interview Fred Linfjärd of Planday about his experiences switching from a one-time billing model to subscriptions. Fred shares his thoughts on:

• Why digital product companies should embrace subscriptions.
• How to justify the switch to your customer base.
• Avoiding the worst of community blowback.
• Must-do tactics for your rollout plan.

As a bonus, our host David Vogelpohl also has experience moving massively popular digital products from one-time fees to subscriptions, so this interview is full of hard-learned insights you can use to find success in your own rollout of subscriptions.

Whether you’re considering switching to subscriptions or are in the middle of switching, don’t miss this chance to learn insider tips on how to make this transition successful for your business. Listen or watch now!

Are you looking for a merchant of record that will help you grow your subscription software business? FastSpring provides an all-in-one payment platform for SaaS, software, video game, and other digital goods businesses, including software management, VAT and sales tax management, global payments, and consumer support. Set up a demo or try it out for yourself.

Jump to video.  |  Jump to transcript.

Podcast Full Interview: Audio

Listen online or find it on more podcast services.

Podcast Full Interview: Video

Transcript

David Vogelpohl  

Hello everyone and welcome to the Growth Stage podcast by FastSpring, where we discuss how SaaS, software, and digital product companies grow revenue, build meaningful products, and increase the value of their businesses. I’m David Vogelpohl. I support the digital product community through my role at FastSpring, and I love to bring the best of the community to you here on the Growth Stage podcast. In today’s episode, we’re gonna be talking about a topic that means a lot to me, very interesting and challenging part

I find of digital businesses, which is successfully switching from one time fees to subscriptions. We often see this in the software universe. And joining us for that conversation today is someone much like myself, who’s been through this before, a lot of war stories to tell. I’d like to welcome to Growth Stage, Mr. Fred Linfjärd. Fred, welcome to Growth Stage.

Fred Linfjärd  

Thank you David, great to be here.

David Vogelpohl  

And it’s Linfjärd I didn’t say that right. I like practiced and practiced and I got it wrong, Fred.

Fred Linfjärd  

You’re not the only one, it’s totally… Okay, it’s perfect.

David Vogelpohl  

Us, us Vogelpohls have no idea what you’re talking about. Uh, but, uh, thanks for, thanks for coming on. I’m really glad to have you here and really interested to hear your story around this idea of successfully switching from one time to recurring. So for those listening and watching, what Fred is going to talk about is that switch from one time to recurring billing models, but he’s going to share his thoughts on why digital product companies who aren’t doing that should embrace subscriptions.

Fred Linfjärd  

Hahaha

David Vogelpohl  

How to justify the switch to your one-time customer base so people who’ve already been buying your product for one-time fees avoiding the worst of community blowback change to subscription can cause some anxiety for folks and Some of the must-do tactics for your own rollout plan So if you’re in the midst of it or you’re planning a switch, this is gonna be a good episode for you

All right, Fred, I’m going to ask you the same question I ask every guest of Growth Stage. What was the first thing you bought online?

Fred Linfjärd  

I bought, it was a long time ago and I think it was a book from Amazon. I know it’s boring, but at the time I think they kind of only sold books. Or it wasn’t like it was today at least. So I would go with that book from Amazon.

David Vogelpohl  

Do you recall what the book was?

Was it how to buy things online?

Fred Linfjärd  

I think it was some type of, it was the early 2000s I guess. I think it was some kind of book on maybe affiliate marketing or maybe it was HTML for dummies. I don’t know.

David Vogelpohl  

Well, I know a lot of HTML and affiliate OGs, so I’m now dying to know the author, but maybe I’ll save that question for your next time on Growth Stage. But a book on Amazon, that’s pretty on the nose. I like that. Okay, and then you’re with a company called Planday. Can you tell us a little bit about what Planday does and what you do there?

Fred Linfjärd  

Sure, yeah. So Planday is, I think the category is called workforce management platform. So B2B SaaS solve needs when it comes to scheduling and time and attendance. So for shift workers serving industries like hospitality, restaurants, hotels, and all these things, and I’m the director of growth there. So yeah, I pretty much try to make sure.

everything from acquisition to monetization plays together well and we drive profitable growth.

David Vogelpohl  

Awesome, well that’s good to hear. And the topic we’re talking about today, the switch from one time to recurring subscriptions, a lot of your war stories are rooted in one particular company switched to that. What company was that? And from the high level, could you tell us about kind of what was happening at that time?

Fred Linfjärd  

Sure, yeah. So I worked at a company called Capture One a few years back and it’s a photo editing software, desktop software. And the biggest competitor is Adobe Lightroom and Capture One is really a software and the company was born out of a camera manufacturing business called Phase One

Fred Linfjärd  

and build that out, that software business.

David Vogelpohl  

And so it was image software effectively.

Fred Linfjärd  

Yeah, raw converter. So a raw converter software to really get the big pictures in and you need a lot of power and that software became really, really good because it had to be good to power the phase one cameras. And then they wanted to kind of monetize that and open it up for other camera brands and make its own business out of it.

David Vogelpohl  

So you mentioned Adobe Lightroom is the biggest competitor. The switch from one time to subscription for Capture One, was this around the same time that Adobe’s creative suite was coming out and they themselves were adopting a more recurring revenue model?

Fred Linfjärd  

Yeah, so I think so. So this was back in 2017, I think. So Capture One had sort of a kindling business on the software. We actually had a home-built ecommerce system and entitlement system, license management system. And we had some subscriptions,

it was a very, very small amount and the big business was perpetual and selling these licenses to the software.

David Vogelpohl  

I’m chuckling a little bit internally, Fred, because around that same year, I was in the middle of my own management of a switch from one-time software to recurring in the studio press business, the WordPress themes that were sold for one time that were going to a recurring model with a compact edge. And so I just imagined us both back in 2017 doing this together and not knowing each other at that time. So, you know.

Fred Linfjärd  

Yeah.

David Vogelpohl  

You talked about how Capture One kind of wanted to take advantage more of subscriptions. I mentioned how Adobe had made the shift from one time to subscription in the way they went to market. But I mean, like why? Why make this shift when your customers are so used to doing it a certain way, and you’re going to come in and disrupt everything? I mean, especially like Adobe was a massive business, but why do this?

Fred Linfjärd  

Yeah, so I think the main thing is it’s a fundamentally…

different way on how you do business when you sell a perpetual versus when you sell a subscription obviously, right? So and so it means that You know you have to do so much stuff to be able to sustain a constant cash flow so, you know every time you release a software version and And you want people to upgrade you need to pay money for it, you know with paid ads your time on sending out emails

these things and it’s just very, it’s not a sustainable way to grow a business like that. And I think at that time, more and more companies really wanted to get into the subscription part because they know how much they can do within their company if they would have a working sustainable subscription model, you’d be able to grow faster, hire more people, you will have a, you don’t need to spend.

as much every time you’re trying to sell an upgrade to your software. So yeah, it’s kind of the holy grail you want.

David Vogelpohl  

It’s, yeah, and I have, I’ve known a lot of people that have one time software businesses and have participated in them at very deep levels on multiple occasions. And you know, you pointed out it was like the release is everything, right? Like the next version of Photoshop is like going to be the big moneymaker for Adobe or something. I mean, it sounds like that was the case at Capture One as well.

where these major releases have to be coupled with marketing and go-to-market efforts and the features in them and the go-to-market had better work or you’re gonna miss your revenue and there’s not much you can do about that because you’re not getting a lot of lift from the work you did before. Is that a fair way to assess that situation at Capture One?

Fred Linfjärd  

Absolutely and it’s not just about the go to market. This actually trickles down into product development, product management, the way you do releases is so different and more smoother and sustainable when you’re on a subscription model because when you do these upgrade releases, it gets very rushed, right? And you need to make sure that all these different features,

like if I hit the majority of people that has purchase power with the feature release, then I’ll get more money, right? But what if I hit the wrong one? Because some updates you have to do, right? Even if they’re boring, even if they don’t give you that wow thing, you know, to, oh wow, this is a new cool thing, now I’m going to get a lot of new people in, right?

struggle and you may start making wrong choices and you’re actually, you know, degrading your product, I would say even to some point.

David Vogelpohl  

Yeah, that’s a really interesting point. And then of course, you’re kind of incentivized to keep your best features for your next major release. And so the combination of those things really moves away from kind of agile methodologies and continuous improvement and really kind of creates these like blockbuster moments for your release, which can be put pressure on your roadmap in the ways you kind of talked about. So.

Fred Linfjärd  

You always have to trump them also, right? So every time there’s gotta be something more cooler and cooler.

David Vogelpohl  

All right, totally. And you’re really trying to earn the renewal, effectively, from the customer. The other issue I found, at least in my own experience, was this idea of maintenance, where especially if you don’t necessarily version it and charge for the next version or something, like maybe you’re giving away lifetime updates or something like that, it can start to put pressure on your return for maintaining that older software that people might

still rely on for some reason. Was that an issue at Capture One, or was maintenance of prior versions not much of a concern when you thought about subscriptions versus one time?

Fred Linfjärd  

I think that I, uh, capture one. I don’t, I think I never seen such a generous, uh, you know, maintenance thing. I think we were, uh, and I think we suffered off an old Yula or something because it’s like, yeah, we will make sure you have updates for, you know, the next 10 years or something. Yeah. And, and, I mean, obviously we had to go in and, and change that anyways, but it’s, uh, and, and even if you don’t even, people might not even write.

David Vogelpohl  

Forever!

Fred Linfjärd  

that in their Ula and then people might just, well you don’t, you’re not saying that you shouldn’t update and keep it up to date so where’s my update you know?

David Vogelpohl  

Yeah, even if you don’t say it, you still might have negative community sentiment. If like your two versions prior torches someone’s photo business or something like that, um, and then that can have ramifications that put pressure on you to just do it anyways, basically.

Fred Linfjärd  

Yeah, definitely.

David Vogelpohl  

Um, you know, it’s interesting. You, you brought up the kind of forever updates. I brought up updates, you know, kind of the conversation led to the idea of like forever maintenance. And, you know, I’ve worked in acquisitions and led acquisitions in the past. And one of the things that often comes up in diligence when a business has a product like that. And I remember hearing this one time from a finance person. That was really funny. Um, they were trying to understand the risk over time.

Fred Linfjärd  

Hehehe

David Vogelpohl  

of buying the business and what the business had to deliver for their customers. And they said, David, they promised infinite upgrade or updates. I can’t divide by infinity. And so I was like, yeah, you can’t look at that. So, uh, so, so this kind of gets us to the KPI side and we talked about, you know, I asked you like, why do this? And you know, it was funny. One thing you didn’t mention was a lot about was you’ll make a bunch more money because you can build on that revenue and success. You talked a lot about the.

Fred Linfjärd  

Hahaha

David Vogelpohl  

the kind of greater benefits. But let’s kind of get down to the KPI. Like what are the primary KPI people really should be paying attention to, you know, as they embark on an adventure to make this kind of shift? Like what should be on their dashboard?

Fred Linfjärd  

Yeah, so I mean, so they’re fundamentally different when you think about, when I think back about how we ran the business on a perpetual metrics, like you wouldn’t see inkling or a metric that would indicate that our customers are satisfied. Like that usually don’t exist on a perpetual dashboard.

Contra to a subscription dashboard where you have metrics like CLV or customer lifetime value, that really indicates that if that goes down, it means really that people are not happy with the product. And follow up on that, you have the churn metric. So how many people are leaving your business either by voluntary churn, so they cancel it because they’re not happy.

And then you have, of course, the typical recurring revenue metrics like MRR or ARR, right, mostly recurring revenue and annual recurring revenue that just kind of builds up, right, that it’s like a stair. It will always go up, right? And you can work towards increasing those. So it’s a very different way of doing business. So it also goes into…

that this becomes a little bit of a change management exercise. There’s so many different things. This is not the traditional pricing exercise like you might do in SaaS or something like that where you go in and you have product marketing and you like you try different pricing. This is goes into the whole business, you know, how you go to market, how you measure your business, how you develop your product. And I think that’s where it usually fails.

or it becomes a struggle, it takes longer time, because there’s many different departments and people that need to basically follow a very disciplined plan, which you don’t really know yet. So you kind of have to chop it up and kind of test your way forward, have a very kind of, I mean, you really need like a project manager to say, or put together a…

Fred Linfjärd  

of people that are working with this, you know, dedicatedly and not have like five different other jobs to do, if that makes sense. I know I went over the off topic here a little bit with the key metrics but…

David Vogelpohl  

Yeah it does.

No, it’s good because I think you kind of clued in a little bit. When people make this change, there’s often the need to make changes. And to your point, you have to make changes in your organization. Like even your billing people need to be trained on the new thing. Their systems of course, need to be changed tech support people. And you kind of mentioned product. And it’s funny because when I’ve seen people make this, when I’ve seen companies make this shift. Wait.

The question that usually comes up from the audience is, why should I pay recurring now? And so this becomes like a driving force for these teams as they’re starting to think about how to roll it out. It’s like, how are we gonna justify it to the community? And I’ve seen many times that the new recurring offering has some sort of like new product features like baked into it that is an additional benefit above and beyond the one time. Has that been your experience or was that, you know,

Fred Linfjärd  

Yeah.

David Vogelpohl  

Capture One approached it.

Fred Linfjärd  

Oh yeah, definitely. And that’s also, uh, the biggest, uh, I would say obstacle. It’s that fear that are we basically just nuking our business by doing this? Everyone’s going to, to leave, right? And it is not actually, uh, that because you have to think about it. Uh, you have, you have to segment your customers, right?

Right? So you have new people that are coming in. Like they don’t really know, right? So every new person that comes in, if you only have a subscription, they came to get your software. I mean, if they’re motivated, they’re not going to leave just because there’s no perpetual, right? So you can put them to the side there. And that’s really what your goal is to grow your business, right? Because if you think about it,

the metric of customer lifetime value, which means that you’re gonna work and make more money on your existing customers, that’s really a subscription metric. But you’re trying to apply it to a perpetual business that is not gonna be profitable. So I would segment it into these different buckets, new and current. And then I will take the current bucket and I would put in, you know.

the VIP group, the early adopters or the really hardcore people that can, if something happens and they are not happy, they could just blow up social media. You need to have a backup plan for these, right? And then you have the existing customers that, okay, well, we’re not making this much money. Like let’s say they buy the software and they’ve never upgraded. They buy the software and maybe upgrade every third time.

You try to just get those that upgrade every time. Every time there’s a new release. You… And you want to make an offer for them. So… That would work for them, right? Also.

David Vogelpohl  

Good.

David Vogelpohl  

Yeah, absolutely. And like you’re talking kind of about a bit of a recurring revenue model. And I think like when you have one time fees, but you charge for the next version, in other words, you don’t get free lifetime upgrades or something like that, then their rate of buying the updated versions essentially becomes their recurring revenue. And the collection of those transactions is their LTV.

And so like when you were thinking through the KPI, as you embarked on this, some of the things you said in this response so far was like my signups. Are they, I’m guessing you were looking at like, did they go up or down? Cause now we’re a subscription for new customers. Um, you were probably wondering about your, um, churn rate by the end of the year and what the, what you think the LTV of those subscriptions would be.

Fred Linfjärd  

Mm-hmm.

David Vogelpohl  

And then I’m guessing you might have compared that to what you thought the LTV of your one-time download customers were. Is this kind of how you might think of the blend, at least on the new customer side?

Fred Linfjärd  

Yeah, I mean, we tried a lot to try to like, how do you calculate churn on upgrades, right? Because every time we need to sell an upgrade, they need to fork out their credit card. So it’s really hard. And especially when you’re doing the switch like us, we had, you’re living in that no man’s land where you have perpetual and you have subscriptions. And I hope we’ll get into that also because that is a place that’s hard to be in.

And you’re trying to also calculate the business with these two very, very different motions and becomes really, really hard to do. Right. Um, so I don’t have that answered.

David Vogelpohl  

Did you look at the data separately for brand new customers versus the one-time download historical customers? In other words, were you tracking the adoption rate from the old customers for the new offering?

Fred Linfjärd  

Yeah, we looked at that and we tried to look at it separately and here it —

David Vogelpohl  

Was it a focus or was it just like leave them alone? They already bought it. If they want the new thing, they’ll buy it. Or did you actively try to get them to convert?

Fred Linfjärd  

Well, we tried to actively get them to convert, but we also saw that was really hard because you’re talking with everyone, right? Especially, I don’t know if you’re, if you don’t have the most advanced automation setup, which we, in the end, we actually did have a good setup, but you’re talking with everyone, which means that you’re going to talk to these people that I bought the perpetual license, I own this and now I’m going to rent it, you know? And it’s like, you know,

David Vogelpohl  

That right, right.

Fred Linfjärd  

And you know, and they’re gonna make noise, right? So you need to have a plan for that and not try to, yeah, and not try to look at it in the same way. But the problem here, David, is that it’s focus. Like how are you going to focus on switching to perpetual when you’re doing that, you know, your peak revenues?

Right? Every upgrade. That’s where all the money comes in. Right? And now you’re going to switch to, you know, that instead you don’t get that focus, which means you’re kind of slowly dying or, or it’s really, really hard to, to maintain a business like that. That’s why you need a really, really solid plan with steps and success metrics and also have the, have the, have the guts to kind of follow in on it. Then you see some company does and there’s going to be people leaving. Right?

but you gotta have faith in your product and the offer that you create on that subscription that it’s fair, that it makes sense, that it’s easy to get out of and then come into again, that kind of stuff. I don’t know, I’m babbling here. The message sends. Ha ha.

David Vogelpohl  

I do. Yeah, it does. It does. And I do want to kind of get in a little bit into the, like, the aspect of like, well, what entitlements do you offer? And how do you think about that in your strategy? But let’s just say entitlements are the same between your subscription and one time offering. What what are the benefits?

to the end customer for buying software through a subscription? Like, you know, nobody ever wants to rent their thing, I guess, but I mean, certainly there’s a benefit for them and not just the company, but what are some benefits of buying software and a subscription model over one time? Obviously costs might be a negative, but what are some good things about it for the end customer?

Fred Linfjärd  

Well, I mean, for once, if you do it right, you know, it’s always the latest version, right? When you’re on the subscription. So you don’t have to fork out 300 or 400 bucks to get that one feature.

And it’s a more, it can be a more maintainable steady sum that you paid 20, 20 euro or whatever it is monthly, or maybe it’s annually. And if you don’t need it anymore, then you don’t have to pay. Right. Then, and, and I think now that’s the normal, but I think back then it wasn’t really, especially not for

the people that feel that, well, I mean, I want to own it. I mean, so you kind of have to, I think maintenance is that one part. And I also think you can shape the offer. So it’s, you get something different with the subscription. Like you get something that you don’t get with the perpetual. And that would be a strategy to play around with, right? So.

So that’s the benefit of the subscription that I see, right? It’s the play, pause kinda thing, and you can kinda, it’s predictable, right? Your cost and what you get out of it. You know that you always will get the latest, and maybe some more, hopefully.

David Vogelpohl  

Yeah, and it’s interesting, you talked about how at that time, making a reference to the idea that people are more used to paying subscription fees for software products these days, I’m guessing a big part in thanks to the rise of SaaS, but also thanks in the rise of downloadable software companies switching to subscription for all the reasons we just talked about.

And so it does feel like there’s less and less options in particular niches to pay one-time fees for software. And it seems like people are getting more used to it. I do think there’s a decent amount of ignorance out there around what is required to properly maintain software and operate a successful software business. But I think just the emotional side of like I don’t wanna rent my software, especially if you’re in a space where that hasn’t really been done much.

be trouble, but it does seem like the sentiment has been changing, especially both from the consumer side, but also from the software company side. Do you agree with that or would you think of that differently?

Fred Linfjärd  

No, I think so. I definitely think so. And I think it’s important to also think in ways on kind of stretching your product offering. Like you can have both. It shouldn’t just, but it should never be the same with some exceptions. Like you have your base product, right? That should be your subscription, but then you can add on, you know, like with Capture One, we had style packs that we came up with.

and which filters that you can kind of sell and you can you can play around with those things and bundle it and include it in subscription or have it standalone or whatever. But you should have your core should always be in one model either perpetual or in subscription and I mean or you find a hybrid like Atlassian or some of those guys that you know I buy it.

for 300 bucks and then I pay a fee, monthly fee for having it fully up to date. And when I stopped paying, well, then I still own the software. I can still use it, but it’ll never get updated again. Stuff like that is, is things that you can think about. So it’s very dependent on how your business is. Yeah.

David Vogelpohl  

Pay for the updates model, yep. I like the pay for the updates model. The other one I really like is where you charge the subscription for feature sets within the software. So the core software stays the same, but you have like an add-on pack that’s like SAS enabled or something like that. And then you do the subscription that way. I’ve seen people find success with that.

Fred Linfjärd  

Yeah, yeah, definitely. And I mean, I think, I mean, especially in, in B2B SaaS versus, I don’t know what you call it, like, uh, or other types of SaaS that, that maybe isn’t the type that Planday has, like a Planday type B2B SaaS, we have our three plans, right? But I think it’s important to think about different ways to monetize and use.

constantly modularize your software because that unlocks these different you know growth levers that you can work with because it’s always going to be a better business practice to get money from your existing customers Than always trying to get new right always trying to get new

David Vogelpohl  

Cheaper to keep a customer than to get a new one, that’s for sure. OK, so it sounds like in general, though, when you think of subscriptions and the shift from one time to subscriptions,

Fred Linfjärd  

Yeah.

David Vogelpohl  

It does sound like you do like to include additional features and not just like a one-for-one switch. And those new entitlements or features are kind of sweetening the pot for the existing customers to adopt the subscription model. Is that a fair summary?

Fred Linfjärd  

Yeah, yeah, I definitely think so. I mean, in the end of the day, you’re going to have to try to convince these customers. But I think it’s also important to, as I said in the beginning, it’s totally okay with doing grandfathering, right? And if you have these group of hardcore players, you can have something special, like kind

them to be quiet kind of deal or whatever like that because they are advocates right and you have to remember that but it doesn’t mean that applies to all so it’s important with the segmentation on your on your business and your existing customer base and also the customer base that you want or you’re trying to penetrate the new vertical or something.

David Vogelpohl  

You know, it’s funny you bring up this idea of legacy entitlements. Like I have old customers and I’m gonna let them keep the same entitlements. And it’s only new people that are affected by the new way. The idea of like grandfathering, I guess. Um, you know, I have a memory of my own rollout for this at one point. And, uh, we, you know, did legacy entitlements, let people keep their old stuff, but people didn’t.

read it that way. They thought we were changing it for them and they still got mad and social blew up. I spent the whole week on chasing down Facebook and Twitter threads. It was pretty bad. But we just didn’t clearly state, I guess, high enough in the announcement that it was their legacy entitlements. And so you try and try and try to make the rollout.

Accepted by the community and like no matter what you do Some people are gonna get mad and I’ve rarely seen a company rolled this out where there wasn’t The community kind of getting up and arms around it. I’ve seen people do better and worse jobs at it But it always happens in my view Or at least from what I’ve seen What are some techniques? How can you approach your rollout? Where you reduce the chances that people get mad?

Fred Linfjärd  

I mean, I think to me it’s simple. I’m not, and, and I don’t, the way I, if I would do this, uh, again, the way I would try to do it, it’s really, really going deep with the customers before you roll it out and really talk about it and, uh, and, uh, you know, have a, have a solid customer community where you can actually, I think it’s fair to be able to ask these questions and say why you’re doing it.

of the day you’re doing it to make the to be able to make the software better to add more people to have to continue on the business and like really be frank and that’s why we need to do this shift and like so you can talk with them and say and ask them questions so i would go much spend a lot of time with the focus groups and really trying to test the different aspects of what i’m

Fred Linfjärd  

Surprise!

David Vogelpohl  

And of course for everybody else it’ll be a surprise but it sounds like what you’re saying is by doing those focus groups you can kind of listen in advance and be prepared for your rollout plan.

Fred Linfjärd  

I mean, it’s only a surprise for existing customers. It’s not a surprise for your new customers because they don’t… That’s kind of how I… So we gotta make sure that the existing ones that it will work for that as well. I mean, it’s kind of the same as, you know, when you have a software that…

And you’re trying to hit the new vertical like I said and you need to do something with the software You got to make sure that you’re not screwing up for the other people that are depending on the software To do to do work, right? Because that’s very easy to do like you’re trying to make it simple the software and all of a sudden It becomes harder for the people that are advanced just adds on to their so So yeah trying to think of it in those ways

David Vogelpohl  

Yeah, I remember. I remember working with some finance executives during some of these times from my past and I remember one of them asking like, all right, why is everybody getting so upset? And I’m like, they’re using this tool to do a job and you just messed up their workflow or, you know, we just messed up their workflow. So, um, it is really interesting to think about like the impact that you have on people when you make this change, does it.

change their underlying business model. Like if I’m a photographer and you go to subscription for Capture One software and then all of a sudden you jack it up, you know, 10X what I was gonna spend last year on it, maybe you messed up my photography business or something like that. I’m not saying they all went to that extreme, but I think the impact side is a really important side. I’m glad you brought that up.

Fred Linfjärd  

Yeah. Yeah, I mean, it’s definitely. And I even think that there were some instances where that happened and we had to roll back fairly fast. So it’s a tough one. I mean, I think it goes back into when you do this, that you also, I mean, the finance part is important, like, because there’s going to be a different type of.

money that’s coming in. Right? I mean, if you’re starting from no subscriptions, right, then you’re starting with very little money that will build up under slow time. So you need to be able to, okay, well, can we afford this switch and how much is going to this investment cost before we’re starting to see the flip where it starts to kind of the flywheel starts to…

uh, you know, actually be more and more profitable. So, uh, I think that’s important because that’s where that’s preventing this. You, oh no, we’re not getting enough money. Stop everything. Let’s do these, uh, you know, 50% campaigns, you know, 50% off, 50% off or, or stuff like that, you know.

David Vogelpohl  

Yeah, a good partnership with your finance team. That’s a great point. And so then on the keeping customers during the transition, managing the negative feedback from the community that such a shift might cause, it sounded like you were suggesting folks talk to their customers in advance and learn what the concerns will be. I also heard you mention Be Frank.

And I think like if I had two points, I would share about this transition. It would be in your announcement email. Put the legacy entitlements at the top of the email, start with who’s not affected because that’s the people that are going to complain first. And if they, if you start with your reasoning, like we we’re changing our business because of reasons, they’re just going to say you’re switching me to subscription and go, you know, go to hell or whatever.

Fred Linfjärd  

Yeah.

David Vogelpohl  

And so, and the second one is be frank though, and that was what you mentioned, and it was like, don’t use the flowery language, just tell them what you’re doing, like an adult, tell them why. And if it’s for business reasons, and you need a successful growing business to continue to invest in the software they love, be honest about that. That was my take, it sounded like some overlap with yours, but how do you think about that?

Fred Linfjärd  

I mean…

Fred Linfjärd  

No, that is exactly that. Be frank and honest. And I think I would add another one. I mean, use your advocates. I mean, try to win over a customer like one-on-one or invite them in for drinks and try to get them to help, get them to help you in the community if you have that to try to help this transition. Because many times

And especially in the Capture One, a lot of customers that are like the old one, the really pros, they would help people, right? And they can help you advocate for it. And they kind of try to bicker with each other and like, well, you know, they’re just doing it for money. And then someone comes in and is like, well, yeah, I mean, but, you know, it takes money to continue to provide the software for us. So, you know, we got to…

that there that is a good reason so a lot of those conversations can be solved by you know advocate advocacy customers so

David Vogelpohl  

Yeah, I’ve had success in the past with, I’ve had success, I’ve had success in the past with like advocacy boards, advisory, I’m sorry, advisory boards with software where you can start to build up.

you know, folks that are contributing and giving insights for the roadmap and how the community is managed. But then also, of course, they themselves can become advocates. And sometimes they agree with the decisions and sometimes they don’t, but I found that to be helpful. And then like you said, to being frank, what I found was that when we were frank, people would read it, understand it. And if somebody else in a thread or forum somewhere was complaining about it,

they would say, well, this was a reason and it seemed pretty reasonable to me, but I understand you don’t wanna pay more or something like that. But not even people we spoke to, but because we were frank, people started being frank with how they explained it to others when it came up. So did you have any similar experiences?

Fred Linfjärd  

Uh, yeah, uh, I’m just going to.

Fred Linfjärd  

silly uh… where we pick up

David Vogelpohl  

So that was my experience. Did you have anything similar?

Fred Linfjärd  

Yeah, I mean, I think so. And I think it really, it’s really nice to see those communities fight for you. I mean, it’s really, really great. It’s such a tremendous help. And I think, you know, building a great product and building a brand, that’s what you get.

you can get these really advocates and you need to really, really take care of them. And with your customer support team being in the front lines or your CSMs, make sure that they get treated. And the way we did this, I think in Capture One, we looked at when we got customer support cases, we always looked…

try to look which group they were in. And if we saw that, okay, well, if this was a customer, if they asked a question like that, hey, even if they were wrong, if we see that they’ve been with us for 10 years and they’ve been an active user, I mean, we would do anything right for them to be happy, even if it’s like, well, it was their fault that they, whatever it may be, I can’t think of what it is. But I…

David Vogelpohl  

It’s such a great example because it in my mind is such a critical part of all this, which is to show folks that you care. Like if you care about the future of the product, if you care about the quality of the product, if you care about your customer’s experience with it, and you care about making the shift from one time to recurring successful for both the company and the customer. That goes so far in helping folks understand why a business might be changing the billing model and I think from my experience I’ve seen people really respond and recognize that it sounds like that was a strategy for you all there at Capture One.

Fred Linfjärd  

Yeah, definitely.

David Vogelpohl  

Awesome. Well, this has been great. I wish we had more time next time we’re in person. We’ll have to run our next Zoom call together or something. We’ll have to nerd out about this. But thank you so much for joining us today and sharing your story here. I think there’s folks who have a lot of value, especially if they’re thinking about going through this themselves. Thanks, Fred.

Fred  

Yeah.

Fred  

Yeah, thank you so much David. It’s a great topic to talk about.

David Vogelpohl  

Half my gray hairs are from that kind of migration. So good luck to anyone out there gaining your own gray hairs right now. If you’d like to learn more about what Fred is up to, you can look him up on LinkedIn. Thanks, everyone, for joining us here on the Growth Stage podcast. I’m your host, David Vogelpohl. Really appreciate you joining us today. And enjoy the rest of your day. Thanks, everybody.

The post EP19: Successfully Switching From One-Time Fees to Subscriptions appeared first on FastSpring.

For this reason, companies selling into Brazil have grown to love Pix. Not only is it a payment method that is instantaneous and convenient, but it’s available to anyone with a bank account in Brazil and has grown to be one of the largest payment methods in the region.

In this article, we’ll break down how Pix works and show why it’s so important to accept it at checkout if you’re doing business in Brazil.

Table of Contents

1. What is Pix?
2. How does Pix work?
3. Pix advantages and disadvantages.
4. FastSpring’s Pix experience.

Looking for an online payments partner and merchant of record that facilitates Pix and other payment methods globally? Check out our latest product announcement, sign up for a demo, or check out the platform yourself.

What Is Pix?

Pix is a payment method that enables its users to send or receive payment transfers within seconds, including on non-business days. Available in Brazil, Pix is a payment method that tends to have a lower acceptance cost because it doesn’t need many intermediaries.

Unlike some other payment methods, Pix has a few specific requirements:

Pix was launched to modernize transactions in Brazil by delivering a fast, affordable, and safe experience for businesses and end users. It not only promotes financial inclusion in Brazil but also drives reduced financial costs and increases security for purchasers in Brazil.

Why Is It So Important to Accept Pix?

Pix is projected to account for 40% of the total value of digital commerce in Brazil by 2026. In addition, Pix is expected to comprise 20% of all digital commerce transactions within all of Latin America by the same year. That means that businesses accepting Pix gain access to millions of transactions yearly that they otherwise would not be able to access.

How Does Pix Work?

Pix works similarly to payment methods in the EU like SEPA and other “Account to Account” (A2A) transfers across the globe, with a few minor differences. Here’s how Pix works from a merchant’s perspective:

1. Enable Pix.
2. Choose a Form of Payment.
3. Deliver Notification.

Step 1: Enable Pix

Pix is available exclusively through service channels of financial and payment institutions in Brazil. Individuals looking to use Pix will automatically have access to Pix via their bank’s mobile application. For businesses, Pix is available through a partner institution via a redirect at the time of purchase.

Step 2: Choose a Form of Payment

Pix offers two forms of payment collection: a Pix alias, or the scan of a QR code. The Pix alias is stored in a user’s cell phone and can be used to make a payment. Or, a QR code can be generated by the payee to start processing the payment.

Step 3: Deliver Notification

Once a Pix transaction is completed, both parties in the transaction are notified of the status of the transaction, whether it is completed or not. Then funds are immediately transferred at the end of each transaction. The confirmation gives both parties the certainty that payment and funds were received or the knowledge that it didn’t go through.

Pix Advantages and Disadvantages

Advantages

Pix has several advantages for companies:

• One stop solution for the unbanked: Pix reduces the reliance on complex identification processes. Transactions can be initiated using simpler unique identifiers such as CPF ( “Cadastro de Pessoas Físicas” which translates to “Individual Taxpayer Registry” ), which makes it easier for the unbanked population to engage in digital transactions.
• Available to all: Pix is designed to be interoperable across different banks and financial institutions across the region, which in turn avoids expensive cross border payments. This fosters a more connected financial ecosystem.
• Availability and instant payment settlements: Pix operates 24/7, allowing users to make transactions at any time — offering increased flexibility for your customers.
• Builds trust and security: Pix incorporates advanced security measures, providing a more secure environment for digital transactions and reducing the risk associated with other payment methods. 

Disadvantages

Pix is not a good option for:

• Transactions outside of Brazil: As a payment method that only operates within Brazil, businesses that don’t have a presence in the country will not be able to accept payments using Pix.
• Large-scale B2B transactions: Per limits enforced by Brazilian banks, any business transacting with more than BRL 100,000 (about $10,000 USD) will be unable to use Pix to facilitate the transaction. As such they would need to seek out other options for payment.
• Recurring transactions: Users who are selling automatically recurring products are unable to use Pix to facilitate these transactions. The Central Bank of Brazil plans support in late 2024, but until then, a user would need a different payment option.

Read our documentation to learn how Pix works with FastSpring.

FastSpring’s Pix Experience

If you’re interested in offering Pix to your Brazilian customers, you can streamline the payment process by signing up with FastSpring. 

Our platform automatically enables Pix for any users offering Brazilian Real (BRL) in their contextual store. Then we handle all of the steps to process your buyer’s order, so you don’t need to do anything except enable BRL as a currency for your products.

Here’s what that looks like from your buyer’s perspective:

1. The customer selects Pix as their payment method.
2. FastSpring asks for required personal details. If FastSpring already has the customer’s details, FastSpring creates a session without asking for the details.
3. FastSpring redirects the customer to the partner’s Pix page.
4. On the partner’s page, the customer provides their CPF (Cadastro de Pessoas Físicas) number, which is required for Brazilian transaction regulation.
5. Once the customer confirms their details, the partner generates a QR code.
6. The customer has 24 hours to scan the code and complete the transaction. During this time, the transaction status is “Pending payment”.
7. If the transaction isn’t completed within 24 hours, FastSpring automatically cancels the transaction.
8. Once the customer successfully completes the payment process, FastSpring displays an order confirmation.

We’re constantly optimizing our system to add payment support for more countries and to provide a smoother Pix payment experience. Let us take on your global payment needs — sign up for free today!

The post How Pix Helps Software Businesses Reach Buyers in Brazil appeared first on FastSpring.

As the Director of Corporate Development & Strategic Partnerships at WP Engine, Carl has worked on many acquisitions and partnerships, including brands like Flywheel, Perfect Dashboard, Block Lab, and recently, Delicious Brains.

Each company brings different combinations of technology, teams, customer bases, and more to the negotiating table — any one of which could be a huge motivator for WP Engine to want to partner with them.

But if you’re not dealing in mergers and acquisitions every day like Carl is, you might have a lot of questions about how to best position your business if you’re interested in selling. 

In this episode of Growth Stage, Carl will dives into his experience running acquisitions of SMB software businesses, including:

• His thoughts on what makes a software company a good target for an acquisition by a brand.
• What factors beyond financials makes a target even more valuable.
• Common operational pitfalls founders should avoid that can make acquisitions more difficult.
• How you should think about building a sellable business.
• And more!

Jump to highlights.

Full Interview: Audio Only

Full Interview: Video

3 Mergers and Acquisitions Insights From Carl Hargreaves

2 Main Reasons Brands Acquire Other Companies

While there may be any combination of features about a business that make it attractive to buyers, it usually boils down to two main reasons a buyer is looking to buy in the first place.

“I’d say there are two big buckets here: There are pure financial buyers, and then there are strategic buyers,” Carl explains.

Financial buyers operate more like holding companies and are often interested purely in potential cash flows from an acquisition.

Strategic buyers may have more complex reasons, such as three to five years strategic plans, entry into new markets, and entry into new product areas. 

Knowing which kind you’re dealing with — or which kind you want to deal with — can be very helpful to your own financial plans. 

Building a Flippable Business vs. Building a Great Business

Your motivations when building a business can also greatly affect how attractive your business is to buyers and how well a deal might go.

Building a flippable business can work, but those are often built by taking advantage of short-term trends. This leaves the sale of the business a lot more vulnerable to the market. You may have to sell while the trend is still hot, even if the market is down.

Building a business that’s great regardless of current trends can be a slightly longer game, but it’s a more stable game. If the market is down but you have a great business with a lasting concept, you can afford to wait out the market and sell when it’s more profitable.

How Bad Tax Management Can Hurt Profits When You Sell

Despite your best efforts to make a business look attractive based on net positives, there are some very important things to ensure you’re doing to avoid net negatives that can seriously cut into your profits from a sale.

Not doing due diligence on taxes and employee benefits — both of which can vary greatly by region — or having a lot of debt can raise the risk factor for the buyer, who then has to set aside more money to cover the issues. And that’s money that they’ll hold back from the deal. 

Interested in learning more about how your SaaS, software, video game, or other digital goods business can partner with FastSpring and let us worry about the taxes? FastSpring provides an all-in-one payment platform for SaaS, software, and digital goods businesses, including VAT and sales tax management, payment localization, and consumer support. Sign up for a free trial or schedule a demo today.

Full Transcript From the Interview

David Vogelpohl 

Hello, everyone, and welcome to the Growth Stage podcast by FastSpring, where we focus on how SaaS and digital product companies grow revenue, build meaningful products and increase the value of their business. My name is David Vogelpohl. I support the digital product community as part of my role at FastSpring. And I love to bring the best of the community to you here as co host on the Growth Stage Podcast. Today we’re going to be talking about a really interesting topic, I think, what brands look for when considering acquiring software companies. And in order to have that conversation, we have someone here with us today who knows quite a bit about that from WP Engine. I’d like to welcome Carl Hargreaves. Carl, welcome to Growth Stage.

Carl Hargreaves 

Hey, David, thank you for having me. Happy to chat on this today.

David Vogelpohl 

Excellent. Excellent. Carl. We’re going to talk more about your background in a minute, but I know you’re a fellow Texan. And I’ve been going with a cool places of Texas virtual background theme all summer. I know we’re kind of getting into fall now here in Texas. But can you guess the cool place in Texas that is my virtual background?

Carl Hargreaves 

I feel like I’m gonna be wrong, I’m gonna guess. Krause Springs.

David Vogelpohl 

Ooh, that’s a really nuanced guess It’s actually Spring Lake, which I’ve never been to, but I’ve always wanted to go I’ll have to chek that out maybe…

Carl Hargreaves 

Where is that? I mean what part of the state?

David Vogelpohl 

I think it’s in between, like Austin and San Antonio, I think it’s like one of those offshoots there so… clear water. So really cool. But hopefully I’ll get a chance to visit that next week or next summer. But for those watching and listening, what Carl is going to talk about today is Carl’s views on what makes a software company a good target for an acquisition. What factors beyond financials make a target even more valuable. What are those like it factors, common operational pitfalls that founders might find themselves in if they’re going through diligence and how to avoid those, and really also just fundamentally how you think about selling a sellable business. And, you know, Carl’s role at WP Engine focuses on this in a big part. And so I’m really looking forward to the insights you’re gonna bring today, Carl, but first, I’m going to ask you the question I asked every guest on Growth Stage, what was the first thing you bought online?

Carl Hargreaves 

The first thing I remember buying online, so TBD if this is actually the first thing, but it was an organ, an electric organ like the musical instrument. So I bought it off Craigslist probably 16 years old. Probably around 50 bucks. It was clearly someone who just needed to get out of their garage. And yeah, I still remember picking up this thing. And just the experience because you’re a 16 year old kid you show up to this total strangers house who’s like in his 50s he takes you into his garage and like this is just so weird. But yeah, we played that organ in a few bands after that. And yeah, it had a good run.

David Vogelpohl 

I wish I would have known about your electric organ skills. I totally would have had you do that here on the show today. Actutally been listened to a lot of Doors recently. They have a lot of that going on. Now that was something you found online and bought in person. Do you happen to remember the first time you entered a credit card for something online?

Carl Hargreaves 

Oh, see, I was teenage years as all this was taking off. So it’s got to be CDs, vinyls, music, like that was all I was purchasing at that age.

David Vogelpohl 

Excellent. Excellent. I’m glad you were buying music back in the day. I know a lot of people are doing file sharing. So that’s that’s very admirable of you, Carl. Well, enough about the first thing you bought online. Although I did find that riveting. Let’s jump into a little bit about your background. And then we’ll get into a little bit of the strategy discussions we talked about a minute ago. But could you briefly tell me about WP Engine and what your role is there?

Carl Hargreaves 

Yeah. WP Engine, we’re the world’s most trusted platform for WordPress. So as probably most listeners know, WordPress is a content management system for building websites. It is far and away the most popular way to build a website 43% of the web runs on WordPress. Our company was founded 13 years ago, to really take a lot of the headaches away from operating a WordPress site at scale. And to this day, we still are the infrastructure, the security, the developer tools, the customer support that you’re going to need to build design power manager a WordPress site. So yeah, in brief, that’s, that’s the company myself, so I’m a director of corporate development and strategic partnerships. So what this means is I touch both mergers and acquisitions, and integrated technology partners. Today we’ll focus on the mergers and acquisitions side. But I also handle our integrations with things like CloudFlare, New Relic, and all the major cloud providers.

David Vogelpohl 

Very interesting. And of course, I knew a lot of this going into this interview, because you and I have worked together when I was at WP Engine and had many adventures in some of these areas. And so I thought bringing you on would be really interesting to kind of get your point of view. Here at FastSpring we have a lot of up and coming technology software and SaaS companies that you know, think about their exit from time to time. And I figured some inside baseball might be helpful as folks think about that. So tell me about some of the acquisitions your team has led for WP Engine, like what were the obviously the public ones, but which ones were… what were they like? And what were some of the companies that were involved?

Carl Hargreaves 

Yeah, yeah. So um, and just shout out here. I think David actually did the first acquisition WP Engine ever pulled off with a StudioPress and Genesis. So, you know, real recognizing real. But, yeah, for myself, most recent deal we did was Delicious Brains. So they were a suite of different developer focused plugins, the most popular being ACF, which I think it has over 2 million installs. Just looking at our user base, they really were that sweet spot of ideal customer profile. So we brought them aboard. It’s gotta be a little over a year ago. Prior to that, a lot of kind of like acquihire acquisitions where we’re acquiring a product, but then also bringing the team over and kind of forming a scrum team out of what used to be a startup. Because that, that just works really well. And it’s easy from an integration standpoint. There’s Perfect Dashboard and Poland. There was Frost and Brian Gardner, who now leads our developer relations team, and then Block Lab out of Australia. And then the largest acquisition we’ve done and the first one I worked on was Flywheel, they were actually kind of a more design focused, freelancer focused competitor of ours. And yeah, that’s, that’s where I cut my teeth on this stuff.

David Vogelpohl 

Awesome. So for those like unfamiliar with the WordPress space, and some of these brands, I guess, it sounds like this is a collection of things like software companies, who have complementary technology that might fit well with your platform and go to market motion. You have acquihires, where the technology is interesting, but also very much so the people not that the people aren’t interesting and everything, but the lead might be that. And then you mentioned Flywheel, which you said was design and freelancer focused, but still in the managed WordPress space, right. And so it was more of a complementary customer bases instead of maybe the lead being complementary technology with maybe the exception of something like local, but is that a fair way to classify some of the acquisitions? You referenced?

Carl Hargreaves 

Yup, definitely. All of them kind of have different motivators there. And, yeah, we’re kind of we take a look at a little bit of everything. So it’s kind of dependent on the opportunity and what we see in that opportunity.

David Vogelpohl 

Excellent, excellent. It sounded like there were some some different scales there, too. You had like a larger org like Flywheel you had kind of mid, maybe mid size or smaller to mid size, orgs like Studiopress. And then you had kind of one and two person organizations in that mix. So it sounds like you’re kind of involved with acquisitions, at least on that side. You’re pretty broad range that fair?

Carl Hargreaves 

Yeah, definitely. We don’t we don’t filter out companies based off their size. Like we are primarily interested in technology, talent, you know, especially if you’re doing something new unique, like, you know, that could be three people in a garage or that could be 100 people. So that’s, that’s not part of the criteria.

David Vogelpohl 

Excellent. Excellent. So let’s dig a little bit into the process. Can you describe the process for buying and selling a business from a brand? I think, like a lot of people think about their exit baby, and they think about, I don’t know, maybe a future acquisition from a PE firm, or maybe they’re ambitious and think they might go public. But how does a brand think about it? What does that process look like?

Carl Hargreaves 

Yeah, yeah.

David Vogelpohl 

And how long should it take, by the way, just like, are we talking like, weeks, months, years, like,

Carl Hargreaves 

No no no, great question. Great question. So typical time range anywhere from three months to six months, just to set expectations there. I’ve seen it go a little bit faster. I’ve seen it go a little bit slower. But business do not sell in a matter of weeks. You know, I’ve seen scenarios where founders have been looking to sell that fast because of cashflow issues, whatever it might be. In fact, the matter is like the amount of digging and diligence that needs to be done to actually close the transaction, it’s going to take at least eight weeks to do that. And then let me let me walk through the process a little bit here. So you know, the formal process doesn’t kick off, until you’ve signed some sort of confidentiality agreement with the potential acquirer ahead of that there may have been, you know, informal conversations about hey, would you ever be open to an acquisition or an investment, something along those lines, however, the process doesn’t really get going until parties are ready to share confidential financials confidential legal information, that sort of that sort of data. And the reason that is, is to put together a letter of intent, which is basically like an indicative offer, on what you would buy the company for, you’re going to need access to financials, you’re going to need to vet the technology and the operations a little bit. And that can’t really get going without entering confidentiality. Typically, that sort of preliminary diligence would be the technical name for it, it’s gonna run four to six weeks. If everything’s looking good, and the acquirer gets buy in at their company to make an offer, they will present you with basically a non binding letter of intent. And the reason I’m calling out the non binding piece is, you know, if you’ve, if you’ve ever put an offer on a house, you can, you should realize that the buyer will accept your offer, but they don’t have the you don’t have to move forward with the transaction. M&A works the same way. Where by our best estimate at this point in time, we want to move forward with transaction, but there’s still more work to do. And this additional work is called due diligence or confirmatory diligence. Here, we’re validating all the assumptions that we had to make in the initial business case to put together an offer. So this, like, this is a lot of digging deep into the financial and legal side. And they’re literally going to ask for bank statements. They’ll tie the bank statements to your financials to your like Stripe account, like make sure everything adds up and was represented correctly. And you know, if due diligence comes out clean, that’ll lead to finalized documents and closing of a transaction. Again, this last section normally takes around two months. But yeah, at a high level, that’s the simplest the process can run. They can get more complicated when there’s multiple potential buyers, etc. But that’s a brief overview of it.

David Vogelpohl 

Okay, so that’s a really good rundown. So the process fundamentally kicks off, there’s some initial discussions, a nondisclosure agreement is signed, in order to get the information you need to do due diligence to validate the assumptions and guessing on your acquisition thesis or investment thesis are correct. Once there’s the non binding LOI, then that gives you basically kind of like an option period on a house where you can dig a little deeper, further validate that, and then finalize the deal. Is that a good overview of that process?

Carl Hargreaves 

Yeah to keep going with the housing house analogy. It’s like you your offer has been accepted, but you haven’t done the inspection on the house yet. So you don’t know if there’s termites in the walls or what could be going on. So yeah, it gives you that period to really do a thorough inspection and confirm every all the assumptions you had to make ahead of that point in time.

David Vogelpohl 

Excellent, excellent. I do want to back up one step real quick and ask you, how does the process start a lot of the time, like, what are the options? Like if I’m, if I own a business, and I’m thinking of selling it, like, am I am I sending you a message on LinkedIn? I’m not trying to fill up your LinkedIn box or anything, but how does how did these processes usually get started? How can business owners think about like how they’re going to go to market their business for sale?

Carl Hargreaves 

Yeah, yeah. So that it can either be buyer initiated or seller initiated. A lot of times if it is seller initiated, they’ll actually use an advisor or a third party to put together an auction process for the business. So typically, what that looks like is you know, your advisor will put together some marketing materials, put together a long list of the companies that they think would be a good fit as a potential acquirer and then help you with that outreach effort and initial screening of candidates. From the  brand perspective, it’s, it works a little bit differently. Like we’re constantly in conversations with different folks in the industry companies that we think are developing interesting technology or tapping into interesting parts of the market. And we’re talking to them about partnerships. We’re talking to them just to learn about what they’re doing. But really just like building those relationships and taking part in the ecosystem, and sometimes those those conversations lead to an acquisition offer. So yeah, that’s, that’s how I put it from from the buyer initiated process.

David Vogelpohl 

Yeah, so like be present in the industry and community as you participate in and brands that are bigger than you that might be looking for acquisitions, you might meet them. That’s a really interesting observation on how that sometimes comes to be. I heard you also mention the advisor, which sounds like it’s good for maybe getting multiple buyers, which could improve your valuation. I’m guessing those advisors also help with preparing for diligence. I remember some of the acquisition journeys, you and I are on some of the people or that were involved with the orgs, we were acquiring were kind of, I don’t know, maybe surprised at some of the things they had to produce for diligence. But do you view advisors is helpful in preparing for that?

Carl Hargreaves 

Yes. And it’s gonna be dependent on the scale of your business, because they, you know, they do not come cheaply. But if you’re a seven figure business, I definitely would say, you know, start start to look into that if you’re feeling like you want to kick off a process. Now, on the smaller side, like the acquihire side, things can be done a bit more informally. But yeah, I think depending on the scale, is when you should consider getting advisors involved.

David Vogelpohl 

Sage advice. Okay, so earlier, we recapped some of the acquisitions that you had participated in and led at WP Engine. And I’m just curious, you know, we kind of categorize them a little bit. But what are like the high level main reasons why a brand would want to acquire a software or SaaS company, or just I guess any company for that matter?

Carl Hargreaves 

Yeah. So I’d say there’s two big buckets here. There, there are pure financial buyers. And then there are strategic buyers. For financial buyers just to hit on it quickly. These folks operate kinda like holding companies. They typically have a space they like to play in, let’s say, I like veterinary businesses. And I’m just interested in scaling the size of veterinary businesses that I own. That comes down to literally does the expected future cash flows sum up to more than what I’m paying for the business today, just a pure financial exercise. On the other side of the house strategic buyers. This is really about acceleration of kind of three to five years strategic plans, entry into new markets, entry into new product areas, primarily is where you see a lot of this. So it is really more an exercise and understanding of the company’s direction, the company’s roadmap and saying, are there things out in the ecosystem that’s really going to add more fuel to the fire and allow us to accomplish this faster?

David Vogelpohl 

I love that way of thinking about it, right? Like the pure financial buyers, I love the holding company example for that one. And then to hear you think talk about strategic buyers. Because I think a lot of times what people think about is well will my technology make their technology better? If I know, you know, one plus one does that equal three, like that’s the fundamental principle there. But you also called out things like new markets, new buyers. And so I think this is another area where people might not realize they have strength in their company, which is that if they have you know, large customer bases in a region where an acquiring company doesn’t have customers there, that can be a fast path to enter there. So it is more than just technology additions for strategic buyers. Is that how you look at it?

Carl Hargreaves 

100%, especially like your your geographic example is perfect. So imagine my company wants to start operations in Latin America, we don’t have customer support in Spanish, we do not have sales in Spanish. We don’t even have like a presence in the market. If we can go out and find a company that’s already established in the market and is operating effectively. That deep takes a lot of risk out of the equation for us entering the market starting a team from scratch. So things like that are great areas for for M&A.

David Vogelpohl 

Yeah, that’s a really good point. And it reminds me of the FastSpring acquisition because the again kind of getting back to the idea that there the WP Engine FastSpring platform, had kind of some core similarities, but then some unique differences. And so the this was I would guess, strategic. I’m guessing that’s almost all that you do. But what are some of the other factors that go into considering an acquisition of a I’m gonna throw  a quote here, competitor, other than just the financials, other than just, you know, acquiring market share something like that?

Carl Hargreaves 

Yeah. So typically, this is like gonna be the textbook answer for you, typically, and you describe it as the one plus one equals three sort of equation that people talk about with M&A. For a competitor, you’re going to make that work through cost synergies, because you’re acquiring a business that’s extremely similar to your own, you’re going to have areas of overlap areas of optimization that you’ll be able to lean into. So for example, do we have a vendor in common? Do I have better pricing with that vendor? Can you then inherit that pricing from me, that’s a cost synergy. Of course, you don’t need two CFOs you don’t need two of a lot of things. So you know, if there’s a founding team that’s going to leave, after the acquisition, that that can be an additional synergy. You know, there’s a lot of areas you can look at the efficiency of customer service and say, hey, we actually know how to do this more efficiently. Can we teach this other organization and then realize more synergies that way. With a competitor that’s kind of fertile ground to lean into for an acquisition. I think the other thing that’s really, when competitive acquisitions become even more interesting is when you identify what’s unique about that competitor. Are they selling to a different buyer? Does their go to market motion look a little different? Do they actually have some products you don’t have? And is there a way you can lean into that longer term, to actually make that one plus one equals three, like if I was, you know, if I was teaching someone how to do my job, I’d say make a base case. And on the base case, it’s just cost synergies and make the math work that way. What you actually want to achieve is that, but then also long term revenue synergies of expanding your market expanding your TAM.

David Vogelpohl 

You know me Carl, I always love the growth story. So we have this notion of synergies with acquiring competitors. And we know that one of them is that we don’t have to double spend, I like the example of the founding team, you know, having an exit after the acquisition. You know, and I think as founders, I’m sure a lot of folks are anxious about their team during an acquisition. And I know some acquiring parties, you know, are better than others at retaining existing employees. We don’t have to get into all that, although I know, WP Engine has an excellent track record there. But what I, what I really get excited about is like when I when I think about, you know, if you have two orgs serving a market in a similar way, if you bring them together, you don’t have to have one team working on feature x and another team working on a similar version of feature x, you can just have one of those teams work on feature x, and the remaining team work on feature y. So I feel like a big part of that growth synergy thesis for a lot of folks is being able to get to the end faster. And I don’t know if you’ve experienced that often, or how you think about it from the kind of long term growth perspective.

Carl Hargreaves 

The ideal scenario is you kind of take the best pieces of both organizations, and you lean into that. I think, especially as your like your your example was from the product and engineering perspective. And that’s definitely true, you can, you can discover things that you that the other party was doing that were great ideas that your team hasn’t, hadn’t come across yet. So that’s definitely true, but also go to market motions, you’ll find that like team structures are different. And actually, as you start breaking into like efficiency of marketing spend, they may like you know, the the acquiree or maybe the acquirer may be doing things in a much more efficient way. So it’s really about like taking the learnings from both organizations and like mind melding them to create, you know, something a bit better.

David Vogelpohl 

Totally. Okay, so I’m curious then for like technology focused acquisitions as their company has x and that would be a good fit with us. What are some of the high level factors involved with those?

Carl Hargreaves 

Yeah, so this goes back to fit on the company’s existing strategy. And I think this is from where I sit, we’re in the WordPress ecosystem. There are 10s of 1000s of plugins, there are 1000s of SaaS companies out there and our users leverage these products. So there’s so many areas we can move into. I think what’s critical is for us to maintain focus of what do we think are the best market opportunities? And what are the market opportunities we’re already leaning in towards, and using M&A as an accelerator for realizing those outcomes. So it is really, as I’m looking at different technology companies, it is really where do they slot into our plans for for a certain space? So a lot of it’s fit. You know, and you can’t, you can’t make that up. A little bit is serendipity, as far as like, okay, is there actual alignment in the the market opportunities these two companies are going after? So, yes, I think there is a big, there’s a factor here of timing and luck. And just like, things lining up, right that like it’s, it’s hard to manufacture. It just has to happen.

David Vogelpohl 

Yeah, totally makes sense. I also liked how you kind of start with what’s our existing strategy and roadmap and thinking of acquisitions as a way to accelerate that. It also sounded like you touched on potentially opening up new opportunities, maybe something that wasn’t on your existing but starting with the existing. So it feels like if you have a software or SaaS company, understanding potential buyers, where it looks like their roadmap is headed and how you might fit in could be a good way to think about how what potential acquiring customers might might be in your future companies might be in your future. So I’ve had many acquisition adventures, even even beyond WP Engine. And I can remember from the past and diligence, stumbling across folks that hadn’t, you know, done their taxes, right, or something like that. Has, what are some of the other common pitfalls that you know, folks run into during diligence where they’re like, Oh, my goodness, I didn’t realize X?

Carl Hargreaves 

Yeah, this is where the war stories start to come out. And you realize they’re all you know, they’re all unique. Like, there’s so many quirks.

David Vogelpohl 

Of course, please names and companies. Leave that out. Yeah, love some war stories.

Carl Hargreaves 

But really common. If you have gone out and you have raised debt, you have raised equity, being really familiar with the covenants of those debt agreements. And also like the term sheets, you’ve got from investors. A lot of times, founders won’t have taken the lens of what those agreements, what repercussions they could have on a potential acquisition. As far as kind of like there’s a there’s a loan actually, does the bank that made the loan actually need to approve the acquisition? Like that can happen. Does an investor get a right to be informed? Or do they actually have to consent for the transaction to happen? You see it. It can range depending on the terms, but really being familiar with what those terms are, is critical. And then aside from that, there are a lot of dependent on geography. Depending on what state you’re Incorporated in, what country you’re incorporated in where you’re doing business. There’s a lot of regional quirks. These typically have to do with taxes, as you just called out, but also benefits. So a lot of times, I think, as I was describing the process before, the acquirer won’t have an understanding of this when they were doing their initial assessment. And then as they’re digging in and really doing due diligence, they’ll start to realize like, oh, there’s actually significant additional costs because we have to pay out x benefits or x sales tax. And, frankly, that’s going to come off whatever the initial offer was, to keep the acquirer whole. So that’s definitely something to be aware of. Best way to get ahead of that is talk to people in your regional markets who have sold businesses, they’ll tell you, here’s what you got to watch out for. And then of course, if you’re already further along the process, there’s gonna be region specific counsel who will know this stuff in and out.

David Vogelpohl 

So the way this plays out then would be something like you do diligence you do discover they have employees and X locations you discover they maybe haven’t been compliant regarding the way they pay them, and things like your share of it or income tax type. compliance. And that can cause a problem. And then you also mentioned things like sales and VAT tax, where again, you might discover as part of the process, maybe they’re not, that’s a sweet spot for me, because FastSpring is a merchant of record, we handle that for our customers.

Carl Hargreaves 

Yep.

David Vogelpohl 

But these are the kinds of things that pop up that you might not have realized. But when somebody’s going to go put up, you know, seven, eight figures or something like that, or more, they’re going to check and make sure is what you’re saying,

Carl Hargreaves 

Oh, yeah, this stuff will get uncovered. And they’ll actually, typically, there’ll be a hold back, a certain amount of money will be held back to actually cover for anything that’s unforeseen. So if a year later we find out there was a bunch of VAT tax that wasn’t actually paid, we’ll actually have a pot of money that’s set aside to handle that sort of thing.

David Vogelpohl 

Okay. And I’m guessing that pot gets bigger the more risk you see in the diligence?

Carl Hargreaves 

Yes, yes, yes, exactly. Again, it’s something that gets negotiated. But yeah, that is one way to deal with risk.

David Vogelpohl 

So we’ve talked about kind of building building a sellable business, a lot of this interview. And, you know, I’ve talked to founders that kind of approach it in different ways. I’ve talked to those who on day one, we’re building a sellable business. And I’ve talked to others who are really focused on building a great business, a great product, a great team, and they didn’t pay attention to all the nuances that would make their diligence perfect. Which version is the most viable?

Carl Hargreaves 

What I would say is, is this, the best position you’re going to be in is if you build a great business, you will always have the option to sell. And you will then build in the ability to choose when you want to go out and sell. If you are building a business, just with the notion of hey, I’m gonna flip this in two years. I see that this, you know, there’s kind of a short term trend I’m going to take advantage of, you’re really, you know, at you’re really it depends on what the market does depends on your options. If you’ve built a great business, it doesn’t matter what the markets doing, you can wait out, you know, quirks in the market for a year or two, and then decide to sell your business later. It’s really building that optionality and from having a solid business would be the preferable path. It’s also a better gate, better stance to negotiate from knowing you can walk away from the table at any point in time.

David Vogelpohl 

Excellent. I like that. So build a great business and you’ll always have always have options. I think that’s that’s really sound as folks think about, you know, how to structure their business and then really what they’re building it around. Okay, so last question, what are the top two or three things you recommend software, founders keep in mind when building a sellable business?

Carl Hargreaves 

I think we we hit on the first one, like, best practice is, keep a long list of potential acquirers. If you see an acquisition as the ultimate exit for your business, make that long list early and start building connections, start understanding what those companies are up to. Because that’s A) the relationships are going to make an eventual deal easier to get done. If you have the report, and then B) like the understanding of what those companies are up to will actually inform a bit of the decisions you make about the products you build, and just how you build up your company. So I would always say keep a long list probably have like an A, B, and C tier of these are who I think could ultimately be interested, is best practice. Also, to your previous question, don’t put yourself in a position where you need to sell. That is a really weak start to a negotiation. Like, we’d hit on this also, M&A is very situational, like things really have to line up of, I need to be very have a lot conviction around my strategy to be making a big investment in a certain area. So timing on that is going to be very situational. So you’d rather be in a position where you can you can wait until until people come a’knockin’ and then lastly, I’d say as you’re making big decisions about your company, the type of products you’re going to build the the type of business models and ways you’re going to monetize. Consider the ultimate impact to enterprise value. So for example, you know services are valued at completely different multiples, than like a SaaS business. People who monetize in GMV are valued completely differently. You want to have an understanding of how taking your business in different directions is going to impact the ultimate outcome. And to the, to talk about the previous point of the long list, you also want to know if those businesses would be a good fit for people on the long list. Maybe they don’t touch businesses that go into services. So you’re really gonna limit your options if you go in a direction like that. So that would be my advice.

David Vogelpohl 

Okay, I got it. So we’re gonna keep we’re going to start early and maintain a long list of potential acquires start to build those relationships, keep tabs on what they’re up to. We’re going to try not to get in a position where we need to sell. That makes a ton of sense. Obviously, you command a better valuation. And then I really liked how you pointed out that when you’re making big decisions. Think about how those decisions might support your own valuation in the long term, and then also how it might layer in to your kind of running list of potential acquirers sounds like a good operating system, at least from the high level. But this has been very informative though. I really appreciate you coming on and talking about talking about all this stuff, Carl.

Carl Hargreaves 

Yeah, of course. It’s been fun. You know, this is this is everyday for me. So I love talking about it and you know, happy to come back and go on dive deeper sometime.

David Vogelpohl 

Excellent. Well, I hope folks enjoy the inside look at how brands think about acquiring SAS and software companies. Thanks, everyone for joining today. If you’d like to learn more about what Carl is up to, you can visit WPengine.com. Thanks, everyone, for joining us on the Growth Stage podcast. If you’d like to learn more about FastSpring and how we can help you sell digital products globally, automatically stay tax compliant, and be ready for that diligence, and keep your focus on your products, visit fastspring.com.  Thanks everyone!

The post EP15: What Brands Look for When Considering Acquiring Software Companies appeared first on FastSpring.

To help you understand exactly how FastSpring enables developers with specific types of builds, FastSpring has launched our new “fsBuilds” content series featuring developer-built content showing detailed steps, code examples, and advice on how each developer approached a specific build.

While not every piece of content in the series will include elements of your specific tech stack, we encourage you to check out the example build use-cases you find interesting. These builds will give you  an idea of the basic principles needed to generate your own ideas of how to leverage FastSpring. Of course, our support and sales engineering specialists are also able to help if you need assistance.

Offloading Payments While Retaining Software Distribution

For our first example build in this series, we’re featuring a build by Topher DeRosia of Media Forge showing how to integrate FastSpring checkout into WooCommerce using FastSpring’s Store Builder Library. This build shows you an example of how to use Woo for content management and software distribution and FastSpring to offload the checkout process.

Topher also shows some handy tips for pushing data from Woo to FastSpring in order to make the checkout process faster and higher-converting. Additionally, Topher shares tips for optimizing your checkout for promotions like during cyber weekend. We hope you enjoy this FastSpring Example Build!

The post fsBuilds: Offload Payment Processing to FastSpring While Still Using An Existing Application for Distributing Software (Video) appeared first on FastSpring.

It’s also a great time for shoppers like you to take advantage of those deals! 

In case you missed it, our recent 2023 SaaS and Software Holiday Spend Report highlights how, whether your business focuses on B2C, B2B, or both, SaaS and software Q4 sales bumps are significant around the globe. 

Just as your business can take advantage of the Cyber Weekend sales strategies highlighted in our report, there are many companies offering great deals through FastSpring this holiday season for their SaaS, software, and other digital products. 

Check out the list below for deals on video editing effects and plugins, social media tools, photography software, coding and developer training, presentation design templates, and more!

Are you looking for a merchant of record to help you grow your business internationally? FastSpring provides an all-in-one payment platform for SaaS, software, video game, and digital goods businesses, including VAT and sales tax management, payment localization, and consumer support. Set up a demo or check out our platform yourself.

2023 Cyber Weekend SaaS and Software Deals

World Anvil

“World Anvil is the ULTIMATE all-in-one software for anyone who loves creative worldbuilding! Gamemasters: Keep essential lore & stats one quick click away for immersive sessions. Interactive maps help create an original setting for DnD5e, Pathfinder & 45+ RPGs. Writers: World Anvil is a writing software, novel planner & worldbuilding app! Family trees, mind mapping, and plot templates based on proven storytelling methods help you finish that novel! Publishing, subscription & monetization tools can help build your fanbase.”

Deal: “50% off your first year.”

Deal starts: December 1, 2023

Deal ends: December 31, 2023

Coupon code: FASTFRIENDS50

FxFactory

“The App Store for Video Creators – FxFactory lets you browse, install and purchase effects and plugins from a huge catalog for Final Cut Pro, Motion, Premiere Pro and After Effects.”

Deal: “20% discount on all products.”

Deal starts: November 21, 2023

Deal ends: November 28, 2023

Coupon code: BLACKFRIDAY

SocialBee

“SocialBee is a social media management and automation platform that helps users streamline their social media marketing efforts. Its main features include an AI Copilot that generates a complete social media strategy, direct publishing on major social media platforms, a unified inbox for handling comments, mentions, and messages, and an Analytics section to track the performance of your accounts and posts.”

Deal: “Get a 70% discount for 3 months on monthly plans, or 30% off for 1 year on yearly plans.”

Deal starts: November 24, 2023

Deal ends: November 27, 2023

Coupon code: SOCIALBEEBF23

Capture One

Since Capture One was “Born out of a passion for photography, we provide photographers with the tools to easily collaborate with clients and creatives, achieve the highest quality photographs, and bring their visions to life. Starting out as a RAW image converter for Phase One cameras in 1994, our powerful photography software is built on more than twenty-five years of technical expertise. Today, we offer the fastest tethered shooting in the industry, an intuitive and efficient workflow, unparalleled image quality with support for over 600 camera and lens profiles, true-to-life color processing, and precise editing and collaborative tools.”

Deal: “Black Friday week, offering 50% on all in the store for both new and existing customers.” 

Deal starts: November 20, 2023

Deal ends: November 27, 2023

No coupon code required. 

Skylum: Luminar Neo

“Skylum is a global imaging technology company dedicated to revolutionizing the world of photo editing and creative tools. Its core product, Luminar Neo, empowers photographers of all skill levels to unleash their creativity and transform their visions into reality with advanced AI-based technologies while providing the artist with complete control over the final result.”

Deal: “An exclusive 15% discount on everything at checkout.”

Deal starts: November 13, 2023

Deal ends: November 30, 2023

Coupon code: CyberMonday15

www.iamtimcorey.com

“Software Developers are in high demand today. But how do you learn to code? You don’t need to spend tens of thousands of dollars and relocate to a college or bootcamp. With IAmTimCorey, Tim will teach you the skills you need to become a professional developer using a proven pathway and online courses. Now, you can learn to code like a pro from home.”

Deal: “Get up to 30% off developer training courses during our Black Friday Sale at iamtimcorey.com.”

Deal starts: November 24, 2023

Deal ends: November 29, 2023

No coupon code required. 

SketchBubble

“SketchBubble is one of the leading presentation design firms that specializes in pre-prepared, professionally designed and completely editable PowerPoint, Google Slides and Apple Keynote templates. We pride ourselves on our expertise in professional presentation creation and design and on our longstanding commitment towards fostering creative innovation, generating high-quality products, and maintaining uniqueness.”

Deal: “50% off everything.”

Deal starts: November 18, 2023

Deal ends: November 28, 2023

No coupon code required. 

2BrightSparks Pte Ltd

“2BrightSparks was incorporated in 2004 and has established a reputation in developing high quality, easy to use utility software. SyncBack, our class leading backup software, was first released in 2003. SyncBack is widely used for backing up and synchronizing files across different devices and platforms. It offers features like automated backup scheduling, data compression, and encryption, catering to both individual users and businesses. 2BrightSparks has built a reputation for providing reliable and user-friendly solutions, along with responsive customer support, contributing to its popularity in the data management and protection domain.”

Deal: “20% off new purchases and upgrades of SyncBackPro and SyncBackSE.”

Deal starts: November 20, 2023

Deal ends: December 1, 2023

No coupon code required. 

Muscle and Motion

“At Muscle and Motion, we believe that knowledge is power, and understanding the ‘why’ behind any exercise is essential for your long-term success. Our innovative suite of apps and online courses provide cutting-edge solutions to help you better understand how the body works and how to maximize its performance.”

Deal: “Get 50% off on all “Muscle and Motion” apps & online courses with the Black Friday Sale.”

Deal starts: November 15, 2023

Deal ends: November 30, 2023

No coupon code required. 

Moneyspire Inc.

“We are Moneyspire Inc., a financial software company founded in 2007 and based in Southern California. Our software is used by thousands of people and organizations in over 100 countries. Our mission is to inspire financial success through innovative and powerful software. We strive to provide the best solutions and services for our customers, and we are always listening to feedback and improving. Our vision is to help people better manage their money so they can achieve their full potential.”

Deal: “$20 off new user license.”

Deal starts: November 1, 2023

Deal ends: November 30, 2023

No coupon code required. 

BdThemes

“BdThemes is a WordPress Product development company creating WordPress Themes, WordPress Plugins, Elementor addons and widgets for WordPress users.” 

Deal: “Up to 75% off.”

Deal starts: November 18, 2023

Deal ends: December 5, 2023

No coupon code required. 

WPPOOL

“WPPOOL is a fast-growing software company that promises to build high-quality and high-performance WordPress plugins. We are the creator of WP Dark Mode, Google Sheets to WP Table Live Sync, Easy Video Reviews, FormyChat, and other unique WordPress products. We are always dedicated to create and craft innovative solutions for our users.” 

Deal: “This Cyber weekend, WPPOOL brings you up to 85% off on all WordPress plugins, including WP Dark Mode, Sheets to WP Table Live Sync, Jitsi Meet, and more.”

Deal starts: November 27, 2023

Deal ends: December 1, 2023

No coupon code required. 

Rocket Validator

Rocket Validator provides “Digital accessibility monitoring for busy developers. Find Accessibility and HTML issues in your large sites, in seconds.”

Deal: “30% off your first subscription period.”

Deal starts: November 23, 2023

Deal ends: November 30, 2023

Coupon code: CYBWEEK2023

InventPure Software

“At InventPure, we’re passionate about simplifying your email experience. Our Mail Backup X app is the ultimate solution for secure email backups, migrations, and archiving. Protect your data with ease.”

Deal: “Unleash email mastery with Mail Backup X! For a limited time, seize the Mail Backup X app at just $20 (originally $79), with 1-year maintenance updates. Elevate your email game today! 💻🚀”

Deal starts: November 1, 2023

Deal ends: December 31, 2023

Coupon code: THANKS2023MBX

Apparent Software

“Apparent Software creates helpful, friendly and unique software for Apple devices, complemented by first-class customer care.”

Deal: “50% off any product including ImageFramer add-ons and upgrades.”

Deal starts: November 22, 2023

Deal ends: November 28, 2023

No coupon code required. 

Astra Security

“Astra‘s comprehensive pentest platform combines an automated vulnerability scanner, manual pentest capabilities, and an all-purpose vulnerability management dashboard. With Astra Pentest, you can streamline every aspect of your pentest process – from detecting and prioritizing vulnerabilities to collaborating on remediation. Our innovative AI powered platform emulates the behavior of hackers to uncover critical vulnerabilities in your application proactively.”

Deal: “10% off across all plans.”

Deal starts: November 22, 2023

Deal ends: November 30, 2023

Coupon code: BFCM10

How FastSpring Can Help Your Business

Are you looking for a merchant of record to help you grow your business internationally? FastSpring provides an all-in-one payment platform for SaaS, software, video game, and digital goods businesses, including VAT and sales tax management, payment localization, and consumer support. Set up a demo or check out our platform yourself.

The post Holiday Specials: 2023 Cyber Weekend SaaS and Software Deals appeared first on FastSpring.