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Upsells are a Secret to Growing the Business Twice as Fast The top 50% of growers generate more upsell business than their slower growing competitors. The difference in growth rates becomes more pronounced as the business scales into the $15M+ in annual revenue range where upselling companies grow more than twice as fast. In the early days of the business, net new account growth is a priority for most businesses but the growth rate data and CAC data indicate that upselling existing customers is an important and underemphasized key to growth.

Tomasz Tonguz

More SaaS + Software Stats

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

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

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

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

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

After $10M in ARR, the median growth rate slows to just under 50%

73% of organizations indicated nearly all their apps will be SaaS by 2021

More Growth Strategy Stats

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

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

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

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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%”

Google only has a 30 percent female workforce

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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