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