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).

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More SaaS + Software Stats

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

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

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

How Often Should The Pricing Committee Be Meeting And Making Changes?

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

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

Software and online services are in a period of dizzying growth

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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

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

More Growth Strategy Stats

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

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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

They may forget what you said, but they will never forget how you made them feel.

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

orecasts suggest that global blockchain technology revenues will experience massive growth in the coming years, with the market expected to climb to over 23.3 billion U.S. dollars in size by 2023.

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling