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

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Another key value of having these conversion rates is the ability to understand the implications of future forecasts. For example, lets say your company wants to do $4m in the next quarter. You can work backwards to figure out how many demos/trials that means, and given the sales productivity numbers – how many salespeople are required, and going back a stage earlier, how many leads are going to be required. These are crucial planning numbers that can change staffing levels, marketing program spend levels, etc.

More SaaS + Software Stats

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

How to Reduce Churn

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

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 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

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

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

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

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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%

More Growth Strategy Stats

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

After $10M in ARR, the median growth rate slows to just under 50%

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

The average SaaS company spends just 6 hours determining their pricing strategy

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less