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

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

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

Negative Churn and Expansion Revenue

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

More Growth Strategy Stats

Growing faster has twice as much impact on share price as improving margins

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

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

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

Invention is 10% inspiration and 90% perspiration.

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months