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

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.

More SaaS + Software Stats

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

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

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

Software and online services are in a period of dizzying growth

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

More Growth Strategy Stats

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

Companies with longer contracts (2+ years) reported the lowest annual unit churn

Three uses for the SaaS Guidelines

80% of venture capital investments take place in the enterprise

As of December 2018, there were total 105,000 employees in Lockheed Martin, as compared to 126,000 employees in 2015.

How To Make Pricing A Constant Process In Your Organization

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

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

General Dynamics is a market leader in the aerospace and defense industry. In 2018, a total of 105,600 people were working at General Dynamics.