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.

Totango

More SaaS + Software Stats

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

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

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

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

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

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

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

More Growth Strategy Stats

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

How to Reduce Churn

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

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

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

The median annual unit churn for SAAS companies was 10% in 2016

47% of millennials want to work at diverse companies, according to a recent study.

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