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

Statistic Info

Respondents (excluding the smallest companies) spent a median $1.13 to acquire each dollar of new ACV from a new customer. The result drops to $1.00 if we include companies with <$2.5MM in revenues. The median spend to acquire each dollar of new ACV from a new customer this year is similar to last year’s result of $1.18.

Note to regular ForEntrepreneurs readers: The way CAC is measured here is different than how I normally measure CAC (see SaaS Metrics 2.0 –  A Guide to Measuring and Improving What Matters). In those posts CAC is the average amount that it costs to acquire a single customer. In this survey, CAC is measured as the cost to acquire a dollar of ACV (annualized contract value).

More SaaS + Software Stats

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

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

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

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

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

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

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

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

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

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

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

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

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

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

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

Is your SaaS business viable?

Growing faster has twice as much impact on share price as improving margins

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

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale