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).

For Entrepreneurs.com

More SaaS + Software Stats

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

56% treat “Existing Customer Renewals” as high priority

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

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

Improve Your Pricing Schedule And Turn More Profit

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

More Growth Strategy Stats

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

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

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

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

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

Negative Churn and Expansion Revenue

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

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