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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

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

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

High-growth companies generate 60% fewer sales opportunities than low-growth companies

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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

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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

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

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

More Growth Strategy Stats

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

Software and online services are in a period of dizzying growth

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

Invention is 10% inspiration and 90% perspiration.

54% treat upselling and add-on sales as high priority

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

Cloud application services (SaaS) to reach $126 billions by the end of 2021