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

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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SaaS + Software Stats

• 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
• 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
• The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers
• SaaS organizations are now operating in over 100 countries
• 86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available
• In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal
• Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes
• 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.
• 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

SaaS & Tech Growth Strategy Stats

• In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%
• 26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.
• Negative Churn and Expansion Revenue
• in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion
• When venture capitalists participate in seed rounds, the average round size is 3x larger
• At Facebook, 15 percent of tech roles are staffed by women
• Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases
• All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing
• Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense