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

From RJMetrics
Statistic in Market Research

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

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

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

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

Is your SaaS business viable?

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%”

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

More Market Research Stats

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

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

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

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

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

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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%