Statistic Info

The future of growth is product led. This isn’t merely the latest fad or buzzword. Data shows that companies leveraging a PLG strategy perform better on average -faster growth, higher margins, lower burn and stronger valuation multiples. As with many new operational strategies, OpenView believes product led growth will soon become the norm, making it table stakes for SaaS companies that want to win in their markets. What is your company doing to adapt to the product led growth revolution

HubSpot

More SaaS + Software Stats

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

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

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

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

More Growth Strategy Stats

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

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)

Negative Churn and Expansion Revenue

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

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution