The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

SaaS + Software
Statistic in Growth Strategy

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.

For Entrepreneurs.com

More SaaS + Software Stats

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

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

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

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

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%

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

How to Reduce Churn

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

After $10M in ARR, the median growth rate slows to just under 50%

More Growth Strategy Stats

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

80% of venture capital investments take place in the enterprise

73% of organizations indicated nearly all their apps will be SaaS by 2021

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

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

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

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

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