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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Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

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

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 annual unit churn for SAAS companies was 10% in 2016

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

55% of SaaS companies rate Customer Retention as the key metric to measure

More Growth Strategy Stats

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

Negative Churn and Expansion Revenue

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

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.