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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).

For Entrepreneurs.com

More SaaS + Software Stats

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

Investment in marketing automation tools is expected to reach $25 billion by the year 2023

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

54% treat upselling and add-on sales as high priority

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

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

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

More Growth Strategy Stats

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

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

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

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

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

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

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

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

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR