In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

From Statista
Statistic in SaaS & Tech Growth Strategy

IT Services Market

A key sub-sector of the larger information technology industry, the IT Services market brings in hundreds of millions of dollars each year, with forecasts suggesting that this number will eclipse the one trillion dollar mark in the near future. Unsurprisingly, given the amount of major tech companies located in the United States, North America is the highest regional consumer of IT services. Digitalization, along with essentially constant technological advancement, means that businesses in nearly every industry rely on IT services and market spending continues to grow steadily each year.

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

Negative Churn and Expansion Revenue

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

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

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

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

The best place to hide a dead body is page 2 of Google search results.

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

More SaaS & Tech Growth Strategy Stats

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

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

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

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

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

73% of organizations indicated nearly all their apps will be SaaS by 2021

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

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

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