High-growth companies generate 60% fewer sales opportunities than low-growth companies

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The lower Quick Ratio for these larger, more mature companies is further proof that the Quick Ratio looks quite a bit different when used to evaluate young SaaS startups and more mature, steady-state companies.

More SaaS + Software Stats

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

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

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

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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

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

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

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

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

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

More Growth Strategy Stats

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

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

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

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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

Three uses for the SaaS Guidelines

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing