When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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In many SaaS businesses, sales reps play a key role in closing deals. In those situations, the number of productive sales people (Sales Capacity) will be a key driver of bookings. It is important to work backwards from any forecasts that are made, to ensure that there is enough sales capacity. I’ve seen many businesses miss their targets because they failed to hire enough productive salespeople early enough.

It’s also worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps.

When computing Sales Capacity, if a newer rep is still ramping and only expected to deliver 50% of quota, they can be counted as half of a productive rep. That is often referred to as Full Time Equivalent or FTE for short.

Another important metric to understand is the number of leads required to feed a sales rep. If you are adding sales reps, make sure you also have a clear plan of how you will drive the additional leads required.

More SaaS + Software Stats

SaaS IPOs have more than doubled over the last 12 years

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

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

Negative Churn and Expansion Revenue

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

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

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

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

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

More Growth Strategy Stats

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

At Facebook, 15 percent of tech roles are staffed by women

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

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

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

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

56% treat “Existing Customer Renewals” as high priority

Customer Segmentation analysis will help point out which are your most profitable segments

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing