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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.

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More SaaS + Software Stats

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

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

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

Companies with longer contracts (2+ years) reported the lowest annual unit churn

Customer Segmentation analysis will help point out which are your most profitable segments

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

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

SaaS IPOs have more than doubled over the last 12 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

More Growth Strategy Stats

54% treat upselling and add-on sales as high priority

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

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

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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

SaaS IPOs have more than doubled over the last 12 years

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