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

Statistic Info

This has a huge impact on unit economics and begins to explain why winning companies place such a large focus on upsells as they mature. The bigger your customer base, the bigger the opportunity to move the needle through upsells.

Upsells aren’t always easy, and depending on the dynamics of your business model they may not even seem like an option. I believe the average company focuses so much on growth through new accounts because that path seems larger, more obvious, and, frankly, easier. But, as we all know, oftentimes the hard thing to do and the right thing to do are one in the same.

More SaaS + Software Stats

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

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

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

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

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

Is your SaaS business viable?

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

More Growth Strategy Stats

Three uses for the SaaS Guidelines

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

Software and online services are in a period of dizzying growth

47% of millennials want to work at diverse companies, according to a recent study.

SaaS IPOs have more than doubled over the last 12 years

High-growth companies generate 60% fewer sales opportunities than low-growth companies

How to Reduce Churn

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

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

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