{"id":13592,"date":"2023-03-29T15:24:51","date_gmt":"2023-03-29T19:24:51","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?post_type=sage_glossary&#038;p=13592"},"modified":"2023-04-06T05:13:11","modified_gmt":"2023-04-06T09:13:11","slug":"what-is-average-sales-price-asp","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-average-sales-price-asp\/","title":{"rendered":"What is average sales price (ASP)?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is average sales price (ASP)?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is average sales price (ASP)?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-average-sales-price-asp\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<p class=\"\">Average sales price (ASP), also called average selling price, is a SaaS metric that refers to the average initial price of a product or subscription service sold to a new customer. ASP may vary by product line and the product life cycle and is measured as the average sales price of the product across multiple distribution channels, specific offering within a company, customer segment, or even across the market as a whole.<\/p>\n\n\n\n<p class=\"\">By tracking and analyzing ASP, it can tell you what sales strategy to employ. Additionally, management and marketing professionals may be able to gain a deeper understanding of when it is appropriate to increase sales and marketing (S&amp;M) spending, reduce prices, expand to new markets, or even as simple as redesigning product packaging and messaging.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How to calculate average sales price<\/h3>\n\n\n\n<p class=\"\">Calculating the ASP of a product or service can be found with the formula:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"940\" height=\"190\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/12\/average-sales-price-ASP-formula.png\" alt=\"\" class=\"wp-image-13593\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/12\/average-sales-price-ASP-formula.png 940w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/12\/average-sales-price-ASP-formula-768x155.png 768w\" sizes=\"auto, (max-width: 940px) 100vw, 940px\" \/><\/figure>\n\n\n\n<p class=\"\">Keep in mind that Total Revenue could be based on your customer segments or product types. Customer Count needs to match the breakdown of Total Revenue. To clarify as a formula:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/12\/how-to-calculate-ASP-1024x293.png\" alt=\"\" class=\"wp-image-13594\"\/><\/figure>\n\n\n\n<p class=\"\">A good practice for management teams and marketing professionals is to monitor the change in the ASP over time. To do this, set a certain time period for calculating changes in ASP.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example ASP for a SaaS company<\/h3>\n\n\n\n<p class=\"\">In the below example, let\u2019s assume a SaaS company offers a mix of products and services with the following ASPs:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/12\/ASP-example-1024x255.png\" alt=\"\" class=\"wp-image-13595\"\/><\/figure>\n\n\n\n<p class=\"\">From this information, we can infer that Product B is the company\u2019s cash cow in terms of revenue generation. Assuming product A and Product B have similar expenses, in this scenario the company may be inclined to focus on growing the customer base of Product B.<\/p>\n\n\n\n<p class=\"\">In addition, knowing the ASP of different products and services can help companies identify upsell opportunities. Not only does average sales price show investors whether a company is betting on the right products to generate increasing revenue, tracking this metric also offers downside protection, as understanding the value of individual offerings can allow companies to focus on the most profitable products in tough economic times. Expanding on the previous example, the SaaS company would add a pricing column for the different products and services.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/12\/track-ASP-identify-sales-strategy-1024x248.png\" alt=\"\" class=\"wp-image-13596\"\/><\/figure>\n\n\n\n<p class=\"\">While Product A has an upsell opportunity of $20 per customer per month (from $50 to $70), Product B has an upsell opportunity of $300 per customer per month. This means the example SaaS company should be paying much more attention to upsell opportunities for customers of Product B.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How to track and analyze ASP and other SaaS metrics in real-time<\/h3>\n\n\n\n<p class=\"\">SaaS companies can transform reporting, decision-making, and board meetings with real-time metrics tracking and analysis. You can track and analyze average sales price and other SaaS metrics using See Sage Intacct SaaS Intelligence \u2013 see it in action with our\u00a0<a href=\"https:\/\/www.sage.com\/en-us\/sage-business-cloud\/intacct\/industry\/subscription-saas\/saas-metrics\/\" target=\"_blank\" rel=\"noreferrer noopener\">on-demand product tour<\/a>. We\u2019ll walk you through how our SaaS metrics dashboards can help you calculate critical KPIs and empower you to communicate the trends you\u2019re seeing and the story behind the numbers with transaction records.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Average sales price (ASP), also called average selling price, is a SaaS metric that refers to the average initial price of a product or subscription service sold to a new customer. ASP may vary by product line and the product life cycle and is measured as the average sales price of the product across multiple [&hellip;]<\/p>\n","protected":false},"author":1309,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[420],"class_list":["post-13592","sage_glossary","type-sage_glossary","status-publish","hentry","tag-cloud-financial-management"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary\/13592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1309"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary\/13592\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=13592"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=13592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}