Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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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.

More SaaS + Software Stats

How to Reduce Churn

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

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

Cloud application services (SaaS) to reach $126 billions by the end of 2021

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

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

80% of venture capital investments take place in the enterprise

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

More SaaS & Tech Growth Strategy Stats

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%”

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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

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

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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

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

Google only has a 30 percent female workforce

At Twitter, 10 percent of tech roles are staffed by women