To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

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If you haven’t done so yet, it’s time to establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals. Then lock these goals in with a service-level agreement between your marketing and sales teams.

From here, clearly define how many marketing-qualified leads must be delivered to the sales team in a given month along with what percentage of those will become sales-qualified, then opportunities, then customers. These metrics will allow you to determine how many account executives will be needed for the sales team when factoring monthly quotas and quota-attainment percentages. It will also help you determine how many visitors and leads the marketing team needs to generate to hit its goals by working backwards from these metrics.

More SaaS + Software Stats

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

Is your SaaS business viable?

More Growth Strategy Stats

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

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

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

A 1% increase in pricing strategy yields an average 11% increase in profit

The average SaaS company spends just 6 hours determining their pricing strategy

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

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months