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

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The phenomenon of longer contract terms for larger contracts is pretty clear. Companies in the “elephant hunter” group are less aggressively booking super long-term contracts. Respondents with >$250K median ACV book nearly 25% of their contracts at 3 years or longer (down from 35% in the 2015 group).

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SaaS Bookings: Three Contributing Elements

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

Revenue Churn vs Customer Churn – why are they different?

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

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

In contrast, only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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

Growth yields greater returns

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

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

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