Statistic Info

The median result is notably higher than compared to previous surveys, where the $1.07 and $0.92 were reported in the 2014 and 2013, respectively. Respondents (excluding the smallest companies) spent a median of $1.18 to acquire each dollar of new ACV from a new customer. The result drops to $1.06 if we include companies with <$2.5MM in revenues.

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More SaaS + Software Stats

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

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

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

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

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

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

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

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

How To Make Pricing A Constant Process In Your Organization

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

More Growth Strategy Stats

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

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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

Software and online services are in a period of dizzying growth

How to Reduce Churn

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

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

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

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

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