Statistic Info

art 1 of the survey results focuses on growth rates, go-to-market trends and cost structure. A new highlight in this year’s survey is data on balancing growth and profitability in SaaS companies,�commonly known as The Rule of 40%.

You can find�Part 2 results here. Part 2 compares application delivery methods, covers more on operational costs, and offers data on gross margins, contract terms, churn rates, capital requirements and accounting methods.

We’ve also created the�forEntrepreneurs 2016 SaaS Infographic. The infographic pulls together major takeaways from the SaaS Survey and ties in advice and insights on key�metrics.

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

Forentrepreneurs

More SaaS + Software Stats

How to Reduce Churn

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

56% treat “Existing Customer Renewals” as high priority

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

80% of venture capital investments take place in the enterprise

The median annual unit churn for SAAS companies was 10% in 2016

More Growth Strategy Stats

Customer Segmentation analysis will help point out which are your most profitable segments

How Often Should The Pricing Committee Be Meeting And Making Changes?

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

54% treat upselling and add-on sales as high priority

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available