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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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

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

How Often Should The Pricing Committee Be Meeting And Making Changes?

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

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

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

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

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

More Growth Strategy Stats

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

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

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

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

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

How to Reduce Churn

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

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