56% treat “Existing Customer Renewals” as high priority

Quote Info

Companies that are doing a good job of controlling churn and driving new revenue from existing customers are on the whole growing substantially faster than their peers. Companies still place priority on new customer acquisition Despite a shift in the metrics companies are tracking, priority and funding for customer renewals and upsell has not increased. This suggests that despite best intentions to focus on monetizing existing customers, day-to-day business realities make it di?cult for companies to shift priority and funding. SaaS metrics shifting focus toward existing customers This year more companies than ever are looking at metrics on existing customers such as customer lifetime value, revenue per user, product adoption, and customer health.

More SaaS + Software Stats

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

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

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

80% of venture capital investments take place in the enterprise

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

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

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

Internet Sales strategies have a significantly lower CAC of just $0.42

Three uses for the SaaS Guidelines

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

More Growth Strategy Stats

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

Google only has a 30 percent female workforce

Invention is 10% inspiration and 90% perspiration.

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

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%”

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

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

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18