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 TonguzMore than 1/2 of SAAS companies increased their spending on customer retention last year
55% of SaaS companies rate Customer Retention as the key metric to measure
Three uses for the SaaS Guidelines
When venture capitalists participate in seed rounds, the average round size is 3x larger
More than two thirds of SAAS companies experienced annual churn rates of 5% or higher
Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
Investment in marketing automation tools is expected to reach $25 billion by the year 2023
After $10M in ARR, the median growth rate slows to just under 50%
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