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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.

For Entrepreneurs.com

More SaaS + Software Stats

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

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

Software and online services are in a period of dizzying growth

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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

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

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

Companies with longer contracts (2+ years) reported the lowest annual unit churn

More Growth Strategy Stats

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

Negative Churn and Expansion Revenue

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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