Statistic Info

One way of measuring the efficiency of a company’s revenue model is to benchmark revenue per employee. Google and Facebook, the two most efficient companies, generate $1M per revenue per employee per year.

Setting aside those exceptional cases and focusing instead on SaaS companies, the typical average revenue per employee is about $190k to $210k per year.

Tomasz Tonguz

More SaaS + Software Stats

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

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

More Growth Strategy Stats

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

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

Is your SaaS business viable?

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

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.

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