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

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

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

80% of venture capital investments take place in the enterprise

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

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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

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

Software and online services are in a period of dizzying growth

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

More than 1/2 of SAAS companies increased their spending on customer retention last year

More SaaS & Tech Growth Strategy Stats

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

Invention is 10% inspiration and 90% perspiration.

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

How Often Should The Pricing Committee Be Meeting And Making Changes?

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

Is your SaaS business viable?

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

Internet Sales strategies have a significantly lower CAC of just $0.42