We’ve shared a lot of elements of Buffer’s enterprise transparently through the years — and one piece we’ve all the time needed to broaden on is the place your cash goes whenever you pay for a Buffer subscription.
We shared a submit about the place your cash went when shopping for a $10 Buffer plan again in 2014 — but it surely was effectively time for an replace.
Rather a lot has modified over the past 9 years, and we wish to share a few of the learnings and insights gained from wanting again at our numbers.
We’re additionally joyful to share a extra sustainable means of offering this data — our new clear pricing dashboard. You may check with it anytime to see the place your cash goes when buying a Buffer subscription, and even look again at earlier years to see how issues have modified.
How our funds have advanced whereas staying true to our mission
Taking a look at our funds over the past 9 years, you’ll discover fluctuations inside the completely different classes. The most important improve you’ll discover shall be our worker bills. Since 2014 our crew has grown from 34 to 78 crew members. These bills have additionally elevated because of:
- the evolution of our wage method
- lots of our teammates rising into extra senior-level roles (and their pay reflecting this!), and
- our dedication to maintain up with market charges in terms of how we pay our crew.
One other necessary element to notice is how Common Gross sales Value (ASP) and Bills have modified over time. Our Common Sale Value (ASP) in 2014 was $13, whereas our whole Working Prices have been $3,575,897. In 2022, our ASP was $20, and our Working Prices hit $19,757,852. Whereas our whole Working Bills have elevated by 452 % within the final 9 years, our ASP has solely elevated by 54 % throughout the identical timeframe.
For us, that’s a rewarding indication we’ve stayed true to our mission and technique to help small companies. We’ve deliberately chosen to not go up-market and serve enterprise clients, however somewhat we’re dedicated to serving to small companies and impressive people develop their manufacturers on social media.
A take a look at our pricing historical past
Our ASP additionally displays the adjustments we’ve made to our pricing mannequin through the years. Right here’s a take a look at how our pricing and plans have modified over time:
A more in-depth take a look at the place subscriptions go
Internet hosting
Buffer operates as a software-as-a-service (SaaS) firm. This implies our software program is hosted on the cloud and used over an web connection through an online browser or cell app. Our internet hosting prices embody service suppliers like AWS, Cloudflare, MongoDb, Twitter, and many others.
Service provider Charges
At Buffer, we depend on Stripe, Google, and Apple for our cost processing wants. Stripe funds make up 98.5 % of our whole income and 83 % of our charges. Google and Apple funds make up 2.5% of our whole income and 17 % of our charges. These platforms are important in simplifying our cost operations by offering a safe infrastructure to course of bank card transactions, deal with a number of currencies, and handle recurring funds with out complicated improvement. Safety and compliance are essential to us, and utilizing cost processing instruments ensures the safety of delicate buyer cost data and maintains regulatory compliance.
Salaries + Worker Bills
Worker bills are our largest price range class making up over 80 % of our whole working bills. This class consists of the price for our crew salaries, payroll taxes, and advantages reminiscent of medical health insurance, employer contributions to 401k and pension plans, and persevering with schooling (like conferences, free books, and training!).
Instruments + Operations
We use a wide range of software program instruments to help our crew and clients. These embody admin instruments like Slack, Dropbox, Threads, Expensify, and Notion (to call a couple of!), plus further instruments like Chartmogul, Mixpanel, and Section.
Every space inside Buffer additionally has numerous instruments to help their wants like our Advocacy crew that makes use of Zendesk to serve our clients and Advertising and marketing that makes use of Buyer.io and Pendo for buyer communication and engagement.
A number of classes of bills assist help Buffer’s general operations. These embody bills like outdoors providers reminiscent of accounting, authorized, and consultants. This class additionally consists of our workplace bills like enterprise insurance coverage, financial institution expenses, and web and co-working prices to help our crew to work wherever they’re happiest.
This class additionally consists of the price of computer systems for our crew. Every teammate is eligible for a brand new laptop each three years.
Retreats
Our journey price range consists of all prices concerned in crew gatherings like retreats and meetups. We goal to have one company-wide retreat yearly.
Journey is embedded into Buffer’s values—a lot in order that our total distant crew meets up yearly at numerous spots worldwide. Up till 2016, we had retreats twice a 12 months. However our crew grew so giant over time that it made much more sense to maneuver the gatherings to only every year. Regardless that we absolutely imagine we don’t should be in the identical constructing (and even on the identical continent!) to do nice work collectively, it’s exceptional to see the affect every week in the identical place has on our crew.
Advertising and marketing
Our Advertising and marketing price range consists of prices for promoting (i.e., paid advertising on platforms like Google and Meta) and prices to help work with a content material company and different consultants like those who present providers for app retailer optimization.
Taxes
This class helps the price of gross sales taxes in US states the place we’ve got reached Nexus (i.e., a enterprise presence in a specific state). We additionally pay VAT in the UK. In years the place we’re worthwhile, this class additionally consists of revenue taxes to the US IRS.
Trying forward at our future investments
After we look forward to future years, we anticipate that worker bills will proceed to make up the vast majority of our Working Prices. We stay dedicated to paying our crew pretty and equitably (and transparently!). Buffer is what it’s right this moment due to the sturdy dedication of our gifted crew, and our working prices replicate how a lot we worth every crew member who has devoted their work life to constructing one thing particular alongside us. We’ve plans to evolve our present wage method regularly, and we stay up for the day after we can take away the Value of Dwelling part of our wage method.
One other merchandise on our minds is that we’ve got some thrilling updates coming round fairness at Buffer. We hope to introduce an worker buyback program within the subsequent 12 to 18 months as soon as we return to a spot of profitability.
We additionally plan to proceed to put money into paid advertising. During the last 18 months, we’ve made an intentional effort to put money into paid advertising, which incorporates paid advertisements primarily via Google Adverts. Our common Return On Advert Spend (ROAS) over the past 5 months is a big 198 %. We’re additionally working with a number of outdoors advertising consultants to assist with content material for our weblog and Search Engine Optimization (search engine optimization) work. Our advertising price range has actually grown within the final two years, however we’re seeing this funding repay.
One other space we anticipate we’ll proceed to put money into is AI. At this level, we’ve got constructed an AI assistant to generate content material for our clients, and we’re additionally utilizing AI internally for areas reminiscent of Engineering and Advertising and marketing. There are nonetheless limitless alternatives for AI-powered buyer options, and we’ll proceed to construct upon what we’ve constructed. We additionally foresee that we’ll construct extra superior inner AI instruments to serve our clients higher and proceed exploring how we will make the most of AI to broaden and enhance the in-app help expertise.
Lastly, we’ll proceed to put money into crew retreats and we’re excited that we’ve got already kicked off preliminary planning for a full firm retreat for 2024. In 2022, we kicked off smaller crew gatherings as a option to ease again into meet-ups whereas being aware of Covid publicity. Our 2024 retreat shall be our first full firm retreat since 2019, and we plan on budgeting $5,500 per particular person (roughly $440,000 whole).
Over to You
What else would you wish to learn about our funds at Buffer? Depart a remark under to tell us!
