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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.

For Entrepreneurs.com

More SaaS + Software Stats

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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

Improve Your Pricing Schedule And Turn More Profit

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

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

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

More Growth Strategy Stats

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

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

56% treat “Existing Customer Renewals” as high priority

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

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

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

Invention is 10% inspiration and 90% perspiration.

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%”

The average SaaS company spends just 6 hours determining their pricing strategy

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