Customer Segmentation analysis will help point out which are your most profitable segments

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Two immediate actions that are suggested by this analysis are:

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The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

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

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

Negative Churn and Expansion Revenue

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

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

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

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