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However there is a common way to measure each step, and the overall funnel, regardless of your sales process. That involves measuring two things for each step: the number of leads that went into the top of that step, and the conversion rate to the next step in the funnel.

Another key value of having these conversion rates is the ability to understand the implications of future forecasts. For example, lets say your company wants to do $4m in the next quarter. You can work backwards to figure out how many demos/trials that means, and given the sales productivity numbers – how many salespeople are required, and going back a stage earlier, how many leads are going to be required. These are crucial planning numbers that can change staffing levels, marketing program spend levels, etc.

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More SaaS + Software Stats

56% treat “Existing Customer Renewals” as high priority

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

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

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

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

When venture capitalists participate in seed rounds, the average round size is 3x larger

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

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

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

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

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