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

Not surprisingly, companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less. This year’s results were in-line with previous surveys.

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. In comparison with previous surveys, companies $2.5MM+ have shifted to greater use of field sales (+12 percentage points from 2015).

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SaaS + Software Stats

• The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%
• Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
• The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year
• SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence
• Software and online services are in a period of dizzying growth
• The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers
• SaaS companies in the $7.5MM-$15MM range are among the fastest growers
• As SaaS companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth
• Cloud-hosted applications have a 99% uptime

Market Research Stats

• 86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available
• The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18
• In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.
• Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing
• SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence
• Cloud application services are expected to grow at an average annual rate of 18.5% through 2025
• 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 SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers
• If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer