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

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

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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

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

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

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

More Growth Strategy Stats

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

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

Three uses for the SaaS Guidelines

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%

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews

Negative Churn and Expansion Revenue

Internet Sales strategies have a significantly lower CAC of just $0.42

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

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%