The average SaaS company spends just 6 hours determining their pricing strategy

Statistic Info

Pricing is the most important lever in your business. True, we’re a bit biased given we work with pricing all day, every day. However, think about the fact that everything you do in your business, from sales and marketing to your product and support, works to drive people to your pricing page, convert them, and keep them around as loyal customers.

Yet, we’ve found that companies only spend 6 hours on their pricing strategy in the entire history of their business. Not six hours a year. Not six hours a quarter. Six hours total. That’s kind of like trying to power a jet with a steam engine.

More Tech Services Stats

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

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

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

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

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

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.

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

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

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

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

More Growth Strategy Stats

After $10M in ARR, the median growth rate slows to just under 50%

When venture capitalists participate in seed rounds, the average round size is 3x larger

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

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%)

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

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

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

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

56% treat “Existing Customer Renewals” as high priority

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR