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).

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More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

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 fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

More Growth Strategy Stats

Is your SaaS business viable?

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

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

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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

A 1% increase in pricing strategy yields an average 11% increase in profit

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

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