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.

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Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

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

80% of venture capital investments take place in the enterprise

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

80% of marketers report that their departments are understaffed, making them feel overloaded

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

How to Reduce Churn

More Growth Strategy Stats

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

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

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

In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

Is your SaaS business viable?

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

Analysed 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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth