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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

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

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

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

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

How to Reduce Churn

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

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

Cloud-hosted applications have a 99% uptime

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

More Growth Strategy Stats

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

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

SaaS solutions have the highest security features with 95% security failures due to human error

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

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)