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When removing the smallest companies from the distribution, we find growth rates for companies using mainly Internet distribution lagged. Companies with mixed distribution strategies appear to be more agile and reported the highest growth. There was no distinguishable difference between growth rates for field sales vs. inside sales dominated companies. Rates are largely in line with last year’s survey.

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More SaaS + Software Stats

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Analyzed 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

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

After $10M in ARR, the median growth rate slows to just under 50%

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

More Growth Strategy Stats

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

Analyzed 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

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

Software and online services are in a period of dizzying growth

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%