Quote Info

Overall, the median company devotes 30% of their CAC to marketing expenses, with the remainder allocated to sales. However, internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing. Besides a slight shift towards greater marketing spend by field sales companies, the results are largely consistent with last year’s results.

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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.

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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

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

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

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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 TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

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