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
More Growth Strategy Stats
The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months
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%)
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.