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

Quote Info

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

Is your SaaS business viable?

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

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

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

How To Make Pricing A Constant Process In Your Organization

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

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

When venture capitalists participate in seed rounds, the average round size is 3x larger

Is your SaaS business viable?

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

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

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