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

Quote Info

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).

More SaaS + Software Stats

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

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 fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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

80% of venture capital investments take place in the enterprise

How To Make Pricing A Constant Process In Your Organization

More Growth Strategy Stats

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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

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

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

Negative Churn and Expansion Revenue

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal