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

SaaS + Software
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The lower Quick Ratio for these larger, more mature companies isfurther proof that the Quick Ratio looks quite a bitdifferent when used toevaluate young SaaS startups and more mature,steady-state companies.


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

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

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

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

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

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In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

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

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

Negative Churn and Expansion Revenue

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

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

56% treat “Existing Customer Renewals” as high priority

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