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

Statistic Info

The most significant changes this year include: 1) Upsells: this year just 45% paid full commission rates on upsells, vs. 58% in last year’s group; 2) This year just 32% paid no additional commission on longer term contracts vs. 42% in last year’s group. Not surprisingly, commissions on renewals are typically deeply discounted, with a median rate of 2%. Upsells command a median rate of 8%, and nearly half of the companies pay full commissions on upsells.

More SaaS + Software Stats

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

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

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

Companies with longer contracts (2+ years) reported the lowest annual unit churn

Software and online services are in a period of dizzying growth

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

More Growth Strategy Stats

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

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%”

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

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

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%

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

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