51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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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.

More SaaS + Software Stats

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

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

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

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

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

When venture capitalists participate in seed rounds, the average round size is 3x larger

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

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

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

More Growth Strategy Stats

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

Google only has a 30 percent female workforce

Growing faster has twice as much impact on share price as improving margins

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

A 1% increase in pricing strategy yields an average 11% increase in profit

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