Proprietary Research and Benchmarking Data for SaaS Companies
Each year SaaS Capital conducts one of the largest surveys of private, B2B SaaS companies, yielding actionable insights and benchmarking data for SaaS companies.
Contract Length and Its Impact on Growth and Retention
In this research brief, we explore how private SaaS companies contract with their customers (month-to-month, annual, multi-year and on a usage-basis). We reviewed the distribution in contracting by company size and annual contract value (ACV) and analyzed the impact different contracting methodologies have on growth rate and retention rate. One surprising takeaway is that month-to-month contracting is more compelling as a potential driver of revenue growth than any downside impact it might have on customer churn. Click here to acc
How Fast Should My SaaS Company Be Growing
The first research brief from our 2016 survey explores SaaS company growth rates. Access the full research brief to learn more about growth rates based on company size, retention rates, and funding type.
What’s a Good SaaS Retention Rate?
Net churn is the most fundamental metric impacting monthly recurring revenue (MRR) for SaaS companies. This Research Brief examines retention rate compared to the average selling price of products, the age of the company, and the average contract length. It also explores net retention rates, the impact of customer success, the value created by improving retention, and targets for retention.
The Daunting Math of Growth
If you run a SaaS company, “How fast are you growing?” is usually one of the first questions people ask. Generally speaking, it’s a pretty good question. Revenue growth directly impacts valuation, the ability to attract capital and employees, and is the best single metric for measuring success. Our private SaaS company data measuring revenue growth rates over time.
How SaaS Companies Spend Their Money
In this research brief, we analyze the relative expense structure of private SaaS companies. This data can serve as a baseline for similarly-sized businesses. Your company’s spend level should not necessarily track to the chart, but deviations should be understood, and in most cases, be intentional. If your business is operating in a significantly different way, you should try to understand why. That inquiry might lead to identifying inefficiencies, or possible areas of underinvestment.
Optimizing Sales and Marketing Spending for SaaS Companies
In theory, if the cost of capital was zero, SaaS businesses would optimize their value by investing as much as possible in sales and marketing right up to the point where their Customer Acquisition Cost (CAC) equals the Lifetime Value (LTV) of a customer. Our research provides insight into how SaaS businesses are deploying their capital.
What's the true cost of offering pre-pay discounts to SaaS customers?
It’s commonplace for SaaS companies to offer incentive discounts to customers willing to pre-pay for services one year in advance. Our data revealed 52% percent of private SaaS companies offered discounts to encourage up-front payments. The average discount they reported offering to their customers was 11.5%. In practice, however, the cost of that capital is much more expensive than 11.5% in two critical ways.
No Churn: Keep Customers and Improve Your SaaS Company Valuation
Our white paper provides private company churn benchmarks, and also specifically quantifies the impact of customer churn on a SaaS company’s valuation. This white paper empirically demonstrates that revenue retention rates directly impact a SaaS company’s valuation in a significant way, and to a much larger extent than typically recognized. The impact is dramatic because retention impacts monthly recurring revenue (MRR), growth rates, contribution margin, and total addressable market (TAM). Plus, it has a compounding effect over time.