Statistic Info

Annual trends suggest that metrics such as customer retention cost, customer health, and customer lifetime value are the next big metrics respondents plan to track. Which Metrics Do You Plan To Track? Customer acquisition cost Conversion rates (free to paying) # of new trial or free signups Website unique visitors Customer retention cost Customer health Customer Lifetime Value (CLV) Net Promoter Score (NPS)

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More SaaS + Software Stats

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

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

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

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

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

Improve Your Pricing Schedule And Turn More Profit

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

More Growth Strategy Stats

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

55% of SaaS companies rate Customer Retention as the key metric to measure

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

The median 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

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

Improve Your Pricing Schedule And Turn More Profit

Analyzed 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

56% treat “Existing Customer Renewals” as high priority