Statistic Info

We wanted to find out, so as part of our 2016 Sales Benchmarking Report, we took a close look at the Quick Ratios of the high-growth SaaS companies in our study. We sliced the data in every conceivable way to see what we could uncover about the optimal Quick Ratio for growing SaaS companies, and how the SaaS Quick Ratio evolves as companies grow.

InsightSquared

More SaaS + Software Stats

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

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

How Often Should The Pricing Committee Be Meeting And Making Changes?

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

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

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

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

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

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

More Growth Strategy Stats

After $10M in ARR, the median growth rate slows to just under 50%

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

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

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

Improve Your Pricing Schedule And Turn More Profit

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

Three uses for the SaaS Guidelines

How to Reduce Churn

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues