Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

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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.

More SaaS + Software Stats

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

56% treat “Existing Customer Renewals” as high priority

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

Growing faster has twice as much impact on share price as improving margins

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

More Growth Strategy Stats

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

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

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

Companies with longer contracts (2+ years) reported the lowest annual unit churn

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Women in western countries use the internet 17 percent more than their male counterparts

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

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