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%”

~26% of respondents with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher – “The Rule of 40%”, a popular benchmark for top SaaS company performance.

The median results of those respondents meeting or exceeding “The Rule of 40%” showed that they tended to report lower churn and lower CAC ratios, be more enterprise-focused with larger contracts, rely more heavily on field sales and more often report a vertical focus.

SaaS & Tech Growth Strategy Articles

• An Applied Innovation Model
  Innovation and creativity are becoming increasingly valuable as the need for unique solutions to business problems becomes more salient. Cognitive psychologist Scott Barry Kaufman argues that the creative process can be viewed in four stages: 1. Preparation – identify the problem and perform research 2. Incubation – passive, unconscious period where innovation “percolates” 3. Illumination […]
• How to Determine a SaaS Marketing Budget
  Determining a marketing budget for a SaaS or Software company can be a challenging exercise.  Often there is no one right answer for everyone but there are ways to help you attack the problem.Below, read our expanded article and watch our video with Andy Halko as he shares some helpful tips on how to create […]
• 6 Steps For Optimizing Your SaaS Sales Strategy
  Understand your sales process to help build a better funnel, and guide leads through it.
• Creating A Strategic Marketing Approach for Software & Technology Companies
  The most successful marketing campaigns are executed with a clear vision and goal.
• What Type of Media is Right for Your Target Audience?
  Choosing the most suitable media type is necessary if you want to communicate your message to your technical audiences effectively. Technical audiences require a more technically detailed approach when your IT company is conveying its message to them. Use these media types to ensure that your technical audience is getting the insight you aim to […]
• Marketing Strategy vs. Marketing Plan
  So you’ve tried every marketing tip in the book, and you still aren’t seeing results. You’ve started a blog, engaged on social media, made videos, and done everything else you’ve been recommended. Despite your extensive efforts, you haven’t seen any increase in your business. So what’s the problem? The problem probably isn’t what you’re doing, […]
• How to Determine a Test Pricing Strategy for Your SaaS Product
  SaaS pricing changes as a company grows and matures. Research states that 98% of SaaS businesses have shown positive results as an outcome of changing core aspects of their pricing policies.2022 is the year for your business to revisit your pricing. Due to a growing market, difficult competition, and the fast-paced industry, many SaaS companies […]
• Segmentation, Targeting, and Positioning
  If you try to target everyone you end up not reaching anyone.
• Defining Your Brand Voice
  Have you defined your brand voice? Andy shares his thoughts on why it’s important for you to define your brand voice in your marketing.

SaaS + Software Stats

• The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer
• SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence
• SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer
• 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
• SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)
• The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers
• The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost
• In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal
• Internet Sales strategies have a significantly lower CAC of just $0.42

SaaS & Tech Growth Strategy Stats

• The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017
• orecasts suggest that global blockchain technology revenues will experience massive growth in the coming years, with the market expected to climb to over 23.3 billion U.S. dollars in size by 2023.
• 47% of millennials want to work at diverse companies, according to a recent study.
• It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR
• Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc
• Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month
• 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
• Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
• How To Make Pricing A Constant Process In Your Organization