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

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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%”

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

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

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

Software and online services are in a period of dizzying growth

How to Reduce Churn

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

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

More Growth Strategy Stats

Negative Churn and Expansion Revenue

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

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

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

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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

How To Make Pricing A Constant Process In Your Organization

At Twitter, 10 percent of tech roles are staffed by women

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

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%