The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

From ForEntrepreneurs.com
Quote in SaaS & Tech Growth Strategy

A great way to understand any business model is to answer the following simple question:

Can I make more profit from my customers than it costs me to acquire them?

This is effectively a study of the unit economics of each customer. To answer the question, we need two metrics:

(How to calculate LTV and CAC)

Entrepreneurs are usually overoptimistic about how much it costs to acquire a customer. This probably comes from a belief that customers will be so excited about what they have built, that they will beat a path to their doors to buy the product. The reality is often very different!

More SaaS + Software Stats

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

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

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

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

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

How To Make Pricing A Constant Process In Your Organization

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

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

The median annual unit churn for SAAS companies was 10% in 2016

More SaaS & Tech Growth Strategy Stats

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

orecasts suggest that global blockchain technology revenues will experience massive growth in the coming years, with the market expected to climb to over 23.3 billion U.S. dollars in size by 2023.

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

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

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