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.

For Entrepreneurs.com

More SaaS + Software Stats

80% of venture capital investments take place in the enterprise

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%

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

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

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

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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

More Growth Strategy Stats

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

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

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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

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

Invention is 10% inspiration and 90% perspiration.

When venture capitalists participate in seed rounds, the average round size is 3x larger

How Often Should The Pricing Committee Be Meeting And Making Changes?

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal