Quote Info

A great way to understand any business model is to answer the following simple question:

Can I make more profit from my customers than it costs me to acquire them?

This is effectively a study of the unit economics of each customer. To answer the question, we need two metrics:

  • LTV – the Lifetime Value of a typical customer
  • CAC – the Cost to Acquire a  typical Customer

(For more on how to calculate LTV and CAC, click here.)

Entrepreneurs are usually overoptimistic about how much it costs to acquire a customer. This probably comes from a belief that customers will be so excited about what they have built, that they will beat a path to their doors to buy the product. The reality is often very different!

For Entrepreneurs.com

More SaaS + Software Stats

Is your SaaS business viable?

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

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

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

55% of SaaS companies rate Customer Retention as the key metric to measure

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

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

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

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

More Growth Strategy Stats

55% of SaaS companies rate Customer Retention as the key metric to measure

How to Reduce Churn

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

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

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

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

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%

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.