SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

Statistic Info

The median annual contract size (subscription component only) for the group was $25K per year. These results are somewhat above the previous survey medians of $21K, $21K, $20K in 2015, 2014 and 2013, respectively.

The median average contract length is 1.3 years. The median billing term is seven months in advance. These results are very comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing one month over 2015 to seven months.

More Growth Strategy Stats

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

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

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

SaaS solutions have the highest security features with 95% security failures due to human error

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

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

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

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews