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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.

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More SaaS + Software Stats

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

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Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

Analyzed 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

The median annual unit churn for SAAS companies was 10% in 2016

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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

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

More Growth Strategy Stats

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

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

As of December 2018, there were total 105,000 employees in Lockheed Martin, as compared to 126,000 employees in 2015.

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to 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

54% treat upselling and add-on sales as high priority

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

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

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