Quote Info

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

Three uses for the SaaS Guidelines

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

Companies with longer contracts (2+ years) reported the lowest annual unit churn

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

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

More Growth Strategy Stats

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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

Customer Segmentation analysis will help point out which are your most profitable segments

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

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

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

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services