The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months Quote / Stat
When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep” Quote / Stat
If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer Quote / Stat
SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer Quote / Stat
The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer Quote / Stat
The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers Quote / Stat
The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013 Quote / Stat
The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8 Quote / Stat
More than 1/2 of SAAS companies increased their spending on customer retention last year Quote / Stat
SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time Quote / Stat
Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there Quote / Stat
To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%) Quote / Stat
SAAS companies that are focused mainly on enterprise sales have higher levels of professional services Quote / Stat
Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales Quote / Stat
The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions Quote / Stat
Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing Quote / Stat
SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence Quote / Stat
Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes Quote / Stat
Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less Quote / Stat
Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts Quote / Stat
The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month Quote / Stat
The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100% Quote / Stat
The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year Quote / Stat
The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn Quote / Stat
Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015 Quote / Stat
Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense Quote / Stat
Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts Quote / Stat
Customer Segmentation analysis will help point out which are your most profitable segments Quote / Stat
Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc Quote / Stat
The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel Quote / Stat
In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal Quote / Stat
If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business Quote / Stat
Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn? Quote / Stat
Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem Quote / Stat
Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable. Quote / Stat
SaaS businesses face significant losses in the early years (and often an associated cash flow problem) Quote / Stat
SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime) Quote / Stat
If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth Quote / Stat