Statistic Info

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

For Entrepreneurs.com

More SaaS + Software Stats

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

56% treat “Existing Customer Renewals” as high priority

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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

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

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

More Growth Strategy Stats

Three uses for the SaaS Guidelines

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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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

54% treat upselling and add-on sales as high priority

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

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

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

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

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