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

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Account Churn is very important because it gives a very clear percentage of the customers that are leaving you. It takes away the bias from larger accounts so that you aren’t left with one large customer paying for all of your revenue – which is a dangerous situation to be in

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Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

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

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

How To Make Pricing A Constant Process In Your Organization

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

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

Analysed 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

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How To Make Pricing A Constant Process In Your Organization

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

Software and online services are in a period of dizzying growth

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

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

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

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

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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)