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.
Tomasz TonguzThe median annual unit churn for SAAS companies was 10% in 2016
High-growth companies generate 60% fewer sales opportunities than low-growth companies
Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate