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

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As expected, companies that are focused mainly on enterprise sales have higher levels of professional services. In comparison with last year’s survey, attach rates ticked down for Enterprise and SMB (2015: Enterprise 26%, SMB 18%).

More SaaS + Software Stats

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

Software and online services are in a period of dizzying growth

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

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

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

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

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

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

More Growth Strategy Stats

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

A 1% increase in pricing strategy yields an average 11% increase in profit

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

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

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

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

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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