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 SaaS & Tech 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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

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

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

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

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

More SaaS & Tech Growth Strategy Stats

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

Women in western countries use the internet 17 percent more than their male counterparts

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

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

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

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

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

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

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