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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

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

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

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

Is your SaaS business viable?

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

More Growth Strategy Stats

Analyzed 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

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

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