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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.

 

For Entrepreneurs.com

More SaaS + Software Stats

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

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

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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

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

More Growth Strategy Stats

Women in western countries use the internet 17 percent more than their male counterparts

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

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

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

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

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