Statistic Info

Cost of Customer Acquisition is About 11 Months’ of Revenue The median startup spends about 92% of first year average contract value on the sale, implying an 11 month payback period on the CAC. An additional months’ revenue is required to upsell a customer and about the same is required to close a renewal.

Tomasz Tonguz

More SaaS + Software Stats

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

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

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

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

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 TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

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

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

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

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

More Growth Strategy Stats

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

They may forget what you said, but they will never forget how you made them feel.

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

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

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%)

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

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

In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.

In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.