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

SaaS + Software
Statistic in Growth Strategy

Statistic Info

So, growth is essential to value creation. But is it more important than other factors, such as cost control and operating excellence? We analyzed the relationship of cost structure to growth and found little or no correlation. In every major cost category—cost of goods sold, R&D, marketing and sales, and overhead—there is little or no correlation between the level of expense or investment and growth rate. Fast-growing companies can spend a lot or a little on these categories; it doesn’t seem to matter.

Mckinsey

More SaaS + Software Stats

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

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

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

How to Reduce Churn

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

More Growth Strategy Stats

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

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

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

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

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