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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

26% of SAAS companies with at least $15MM in 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

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

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

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

The median annual unit churn for SAAS companies was 10% in 2016

More Growth Strategy Stats

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

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

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

In 2017, the world invested around 3.4 billion U.S. dollars in small hydropower technologies, down from 3.9 billion U.S. dollars in 2016.

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

Is your SaaS business viable?