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

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

Companies with longer contracts (2+ years) reported the lowest annual unit churn

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

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

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

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

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

More Growth Strategy Stats

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

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

At Twitter, 10 percent of tech roles are staffed by women

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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%

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

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