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.

Tomasz Tonguz

More SaaS + Software Stats

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

56% treat “Existing Customer Renewals” as high priority

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

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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

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

How to Reduce Churn

More Growth Strategy Stats

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

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

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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%)

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

47% of millennials want to work at diverse companies, according to a recent study.

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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers