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

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

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

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

Three uses for the SaaS Guidelines

The median annual unit churn for SAAS companies was 10% in 2016

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

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

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

More Growth Strategy Stats

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

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%

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

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses