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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

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

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

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

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

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

56% treat “Existing Customer Renewals” as high priority

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

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

More Growth Strategy Stats

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

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

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

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

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

Three uses for the SaaS Guidelines

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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