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

SaaS + Software
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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

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

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

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

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

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

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

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

How to Reduce Churn

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

More Growth Strategy Stats

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.

SaaS solutions have the highest security features with 95% security failures due to human error

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

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

47% of millennials want to work at diverse companies, according to a recent study.

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

56% treat “Existing Customer Renewals” as high priority

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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