Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

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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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.
• 56% treat “Existing Customer Renewals” as high priority
• 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
• Software and online services are in a period of dizzying growth
• Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015
• 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
• How to Reduce Churn
• 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
• After $10M in ARR, the median growth rate slows to just under 50%

Market Research Stats

• The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers
• 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
• 54% treat upselling and add-on sales as high priority
• 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%
• Cloud application services are expected to grow at an average annual rate of 18.5% through 2025
• 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
• In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.
• To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)
• SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence