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%).

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

How to Reduce Churn

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

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

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

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

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

More Growth Strategy Stats

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

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

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

In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

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

80% of venture capital investments take place in the enterprise

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