Quote Info

Pricing/Upsell/Cross Sell

  • Multi-axis pricing
  • Additional product modules (easier to sell more to existing customers than it is to sell to brand new customers)
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More SaaS + Software 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.

When venture capitalists participate in seed rounds, the average round size is 3x larger

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

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 Make Pricing A Constant Process In Your Organization

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

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

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

More Growth Strategy Stats

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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

Improve Your Pricing Schedule And Turn More Profit

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

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