Statistic Info

We wanted to find out, so as part of our 2016 Sales Benchmarking Report, we took a close look at the Quick Ratios of the high-growth SaaS companies in our study. We sliced the data in every conceivable way to see what we could uncover about the optimal Quick Ratio for growing SaaS companies, and how the SaaS Quick Ratio evolves as companies grow.

InsightSquared

More SaaS + Software Stats

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

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

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

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

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

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

26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

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

More Growth Strategy Stats

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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

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

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

At Facebook, 15 percent of tech roles are staffed by women

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing