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

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

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

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

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”

When venture capitalists participate in seed rounds, the average round size is 3x larger

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

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

More Growth Strategy Stats

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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

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

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

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

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

Three uses for the SaaS Guidelines

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies