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This is because they have to invest heavily upfront to acquire the customer, but recover the profits from that investment over a long period of time. The faster the business decides to grow, the worse the losses become. Many investors/board members have a problem understanding this, and want to hit the brakes at precisely the moment when they should be hitting the accelerator.

In many SaaS businesses, this also translates into a cash flow problem, as they may only be able to get the customer to pay them month by month.

For Entrepreneurs.com

More SaaS + Software Stats

73% of organizations indicated nearly all their apps will be SaaS by 2021

SaaS IPOs have more than doubled over the last 12 years

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

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

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

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

The global cloud computing market size is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025

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

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

More Growth Strategy Stats

Software and online services are in a period of dizzying growth

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

A 1% increase in pricing strategy yields an average 11% increase in profit

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

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months