The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

From Tomasz Tonguz
Statistic in SaaS & Tech Growth Strategy

Inside Sales Driven Companies Grow Fastest Inside sales driven distribution companies grow about 40% faster than companies using field sales, web sales or channel, or about 37% revenue growth per year.

Price the Product Between $1k to $25k Annually to Optimize Growth Companies with contract sizes of $1k to $25k grow the fastest, about 26% faster or 35% y/y. I suspect there are two reasons to support this pattern. First, purchases under $25k tend to require fewer approvals which decreases sales cycle. Second, these accounts can be closed by inside sales reps which are far less expensive than field sales. On the same sales investment, a startup may be able to hire three or four inside sales reps for each field sales rep.

Cost of Customer Acquisition is About 11 Months’ of Revenue The median startup spends about 92% of first year average contract value on the sale, implying an 11 month payback period on the CAC. An additional months’ revenue is required to upsell a customer and about the same is required to close a renewal.

More SaaS + Software Stats

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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.

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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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

When venture capitalists participate in seed rounds, the average round size is 3x larger

The global cloud computing market size is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025

More SaaS & Tech Growth Strategy Stats

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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

Growing faster has twice as much impact on share price as improving margins

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

When venture capitalists participate in seed rounds, the average round size is 3x larger

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

Google only has a 30 percent female workforce