If you’re actively trying to promote your business, you might have heard about search engine optimization (SEO). But what if you’re a local business looking to drive more foot traffic to your physical store? Should you focus more on local SEO or organic SEO? More importantly, how is local SEO different from organic SEO? In […]
What is Average Selling Price (ASP)?
Average Selling Price (ASP) is a measurement of the average price for which a particular class of good or service is typically sold. ASP is a commonly used SaaS marketing metric. In SaaS, ASP is usually defined as the average MRR added per customer gained in a given time period.
B2B SaaS companies can use the ASP metric in two different ways:
- Measuring Sales Performance – SaaS RevOps teams can measure the ASP for products and services the business offers. Understanding ASP is essential for forecasting revenue, determining the best sales model and go-to-market strategy for a product, and targeting sales process improvements that increase revenue.
- Competitor Analysis – When such information is publicly available, marketers may be able to track ASP for products and services offered by their competitors in the marketplace. Understanding the market-wide ASP for a product or service that you offer can help you customize your pricing strategy and product positioning to maximize revenue.
Other industries use metrics that are similar to ASP to measure average transaction value. In eCommerce and restaurants, the Average Order Value (AOV) metric is widely used. In hospitality, hoteliers use Average Daily Rate (ADR) to track how much revenue is earned for the average occupied room on a given day.