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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%).

For Entrepreneurs.com

More SaaS + Software Stats

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

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

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

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

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

More Growth Strategy Stats

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

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

They may forget what you said, but they will never forget how you made them feel.

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

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

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

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