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

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

Analysed 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

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

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

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

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

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

In contrast, Internet Sales strategies have a significantly lower CAC of just $0.42

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

Growth trumps all

More Growth Strategy Stats

SaaS IPOs have more than doubled over the last 12 years

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

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

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.

General Dynamics is a market leader in the aerospace and defense industry. In 2018, a total of 105,600 people were working at General Dynamics.

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

Growth happens in phases