Quote Info

David Skok has noted that there is a problem with using this formula, as you may have several expensive people in the team that should scale to handle a larger number of customers as you grow. In this case, your CAC will be too high. David suggested making a very simple adjustment to the Sales & Marketing expenses to take only a portion of those salaries and expenses in the early days. This will provide a better indication of how CAC will look in the future when you are at scale.

 

For Entrepreneurs.com

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

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

SaaS IPOs have more than doubled over the last 12 years

How To Make Pricing A Constant Process In Your Organization

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

80% of venture capital investments take place in the enterprise

High-growth companies generate 60% fewer sales opportunities than low-growth companies

After $10M in ARR, the median growth rate slows to just under 50%

Growing faster has twice as much impact on share price as improving margins

Analyzed 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

More Growth Strategy Stats

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

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

Google only has a 30 percent female workforce

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

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

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

Is your SaaS business viable?