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

Statistic Info

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

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

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

55% of SaaS companies rate Customer Retention as the key metric to measure

More Growth Strategy Stats

55% of SaaS companies rate Customer Retention as the key metric to measure

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

Internet Sales strategies have a significantly lower CAC of just $0.42

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

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

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

Is your SaaS business viable?

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts