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.

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More SaaS + Software Stats

56% treat “Existing Customer Renewals” as high priority

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

Is your SaaS business viable?

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

How to Reduce Churn

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

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

More Growth Strategy Stats

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

56% treat “Existing Customer Renewals” as high priority

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 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

In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.

Customer Segmentation analysis will help point out which are your most profitable segments

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)