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

SaaS + Software
Statistic in Market Research

Statistic Info

Companies in the $40-75MM revenue range attribute twice as much new revenue to upsells as the median company.

There are a number of reasons why we might see this effect in later-stage companies. One unexciting possibility is that their overall growth in new business is slowing down and it’s skewing these percentages in favor of upsells. Let’s look at this data through another lens and explore how upsells are related to growth.

RJMetrics

More SaaS + Software Stats

The best place to hide a dead body is page 2 of Google search results.

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

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

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

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

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

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

More Market Research Stats

In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

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%

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

SaaS solutions have the highest security features with 95% security failures due to human error

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

Looking for SaaS focused services?
SaaS Website Design
SaaS SEO Agency
SaaS PPC