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

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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).

More SaaS + Software Stats

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

Internet Sales strategies have a significantly lower CAC of just $0.42

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

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

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

More Growth Strategy Stats

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

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

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

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

Software and online services are in a period of dizzying growth

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers