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What we have found is that each of these lead sources tends to saturate over time, and produce less leads for more dollars invested. As a result, SaaS companies will need to be constantly evaluating new lead sources that they can layer in on top of the old to keep growing.

Since the conversion rates and costs per lead vary quite considerably, it is important to also measure the overall ROI by lead source.

Growing leads fast enough to feed the front end of the funnel is one of the perennial challenges for any SaaS company, and is likely to be one of the greatest limiting factors to growth. If you are facing that situation, the most powerful advice we can give you is to start investing in Inbound Marketing techniques (see Get Found using Inbound Marketing). This will take time to ramp up, but if you can do it well, will lead to far lower lead costs, and greater scaling than other paid techniques. Additionally the typical SaaS buyer is clearly web-savvy, and therefore very likely to embrace inbound marketing content and touchless selling techniques.

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More SaaS + Software Stats

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

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

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

SaaS IPOs have more than doubled over the last 12 years

More Growth Strategy Stats

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

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

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

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

At Facebook, 15 percent of tech roles are staffed by women

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 fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue