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

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

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

80% of venture capital investments take place in the enterprise

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

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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

More Growth Strategy Stats

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

Internet Sales strategies have a significantly lower CAC of just $0.42

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.

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

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.

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

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

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