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

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

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

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

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

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

80% of venture capital investments take place in the enterprise

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

More Growth Strategy Stats

56% treat “Existing Customer Renewals” as high priority

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

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

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

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

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

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

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

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