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

Statistic Info

High-growth companies scale their teams very quickly. In fact, the companies in the sample set grew their teams by 56% annually over five years, which nets out to about 8.5x growth, from 204 employees to 1750 employees on the median.

Despite the massive growth of these organizations, the best companies are able to maintain or even accelerate their revenue per employee. In fact, increases in revenue per employee as a company scales is an incredibly positive sign of the health of the business. It indicates that the company is achieving economies of scale. Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. But in all cases, it’s a hallmark of a company whose economics are improving with time.

More SaaS + Software Stats

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

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

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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

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

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 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

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

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

More Growth Strategy Stats

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

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

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

How to Reduce Churn

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

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

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

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