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

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

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

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

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

80% of venture capital investments take place in the enterprise

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

More Growth Strategy Stats

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

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

SaaS IPOs have more than doubled over the last 12 years

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

Negative Churn and Expansion Revenue

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.