Quote Info

It is often worth providing good financial incentives in the form of discounts to encourage this behavior. The metric that we use to track how well your sales force is doing in this area is Months up Front.

Getting paid more upfront usually also helps lower churn. This happens because the customer has made a greater commitment to your service, and is more likely to spend the time getting it up and running. You also have more time to overcome issues that might arise with the implementation in the early days. Calculating LTV and CAC

The Metric “Months up Front” has been used at both HubSpot and NetSuite in the past as a way to incent sales people to get more paid up front when a new customer is signed. However asking for more money up front may turn off certain customers, and result in fewer new customers, so be careful how you balance these two conflicting goals.

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More SaaS + Software Stats

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

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

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

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

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

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

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

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

The median annual unit churn for SAAS companies was 10% in 2016

More Growth Strategy Stats

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

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

Google only has a 30 percent female workforce

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of 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

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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

Is your SaaS business viable?

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