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Go to Market Strategy – SaaS Benchmarking Stats

SaaS Benchmarking Stats - Median Growth

SaaS Benchmarking Stats are a prerequisite to develop and execute and effective go to market strategy for a SaaS company.  Fortunately, Pacific Crest has recently completed a survey to establish a series of SaaS benchmarking stats.  The goal of the 2016 Pacific Crest Private SaaS Company Survey is to provide useful operational and financial benchmarking data for SaaS companies.

2016 Pacific Crest Private SaaS Company Survey Highlights

  • Approximately $5M median 2015 revenues, with over 60 companies with revenues greater than $25M
  • Median employees (FTEs): approximately 50
  • Median customer count: approximately 250; 28% with more than 1,000 customers
  • 75% headquartered in the U.S.
  • Approximately $25K median annual contract value (ACV)
  • 44% use field sales as the predominant mode of distribution; 23% inside sales

SaaS Benchmarking Stats – SaaS Revenue

Revenue per FTE Efficiency

  • Median is approximately $130K (Excludes companies  with revenues less than $2.5M in revenue)

How Fast Did / Will You Grow GAAP Revenues?

  • The median revenue growth achieved by survey respondents in 2015 was 44% while the median projected growth for 2016 is 48%.

Excluding Companies With Less Than $2.5M in Revenue

  • Median 2015 GAAP Rev Growth ~ 35%
  • Median 2016E GAAP Rev Growth ~ 36%
  • SaaS Benchmarking Stats for companies with $7.5M – $15M in revenues was approximately 60% growth
  • SaaS Benchmarking Stats for companies with $715M – $100M in revenues was approximately 25% – 34% growth

Median Growth Rate as a Function of Sales Strategy (Excluding companies with less than $2.5M in revenue)

  • SaaS Benchmarking Stats - Distribution StrategyFSR: 31%
  • ISR: 38%
  • Internet: 45%
  • Mixed: 38%

Median Growth Rate as a Function of Target Customer(Excluding companies with less than $2.5M in revenue)

  • VSB (less than 20 employees): 35%
  • SMB (100 — 1000 employees): 39%
  • Enterprise (> 1,000 employees): 34%
  • Mixed: 34%

SaaS Benchmarking Stats – SaaS Sales & Marketing  Spend

Sales & Marketing Spend vs. Growth Rate (Excluding companies with revenues less than $2.5M in revenue)

Median 35%

  • Companies spending 45% or more on sales and marketing grew 40% to 80%

Primary Mode of Distribution

While field sales remains the most popular way to sell for companies with greater than $2.5M revenue, companies with less than $2.5M revenue tended to use inside sales as their primary mode of distribution

For companies with revenues greater than $2.5M, the primary mode of distribution was:

  • Internet – 5%
  • ISR – 23%
  • FSR – 44%
  • Mixed – 28%

SaaS Benchmarking Stats – SaaS CAC Ratios

CAC Ratio: How Much Do You Spend per $1 of New ACV from a New Customer?

  • SaaS Benchmarking Stats - CAC Ratio DetailRespondents (excluding the smallest companies) spent a median of $1.13 to acquire each dollar of new ACV from a new customer
  • Median $1.13 (range spans from $0.98 to $1.38

  • Approximately 50% of respondents spend $.75 – 1.50 to generate $1 of new ACV

  • The median CAC ratio per $1 of up-sells is $0.27, or 24% of the CAC to acquire each new customer dollar

  • The CAC ratio number for expansions is $0.20, or 18% of the CAC to acquire each new customer dollar, and for renewals, it is $0.13, or 12%

CAC Composition: Sales vs. Marketing Cost % of CAC

  • Overall, the median company devotes 30% of their CAC to marketing expenses with the remainder allocated to sales

Sales vs. Marketing Cost % of CAC Detail

  • Overall – 70% Sales, 30% Marketing
  • FSR  70% Sales, 30% Marketing
  • ISR – 64% Sales, 36% Marketing
  • Internet Sales –  65% Sales, 35% Marketing

SaaS Benchmarking Stats – SaaS CAC Payback Periods

SaaS Benchmarking Stats - CAC Payback PeriodCAC Payback Period, Gross Margin Basis (Excluding companies with less than $2.5M in revenue)

  • While respondents reported an implied median CAC payback of approximately 18 months, there was a wide distribution of responses
  • Approximately 50% have a payback period between 12 – 24 months

What Percentage of New ACV is from Up-sells & Expansions to Existing Customers?

  • The median respondent gets 15% of new ACV sales from up-sells and expansions; however larger companies rely more heavily on up-sells and expansions

SaaS Benchmarking Stats – Survey Details

The Pacific Crest 2016 Private SaaS Company is based on a survey of private SaaS companies conducted by Pacific Crest’s software investment banking team in the summer of 2016. The survey results include responses from senior executives of 336 companies.

The breakdown of the companies surveyed to create the SaaS benchmarking stats is as follows:

  • TOTAL = 336
  • US: 251
  • Rest of World (ROW): 83

US Breakdown:

  • Northern California / Silicon Valley 53
  • Midwest / Chicago 36
  • Southeast U.S. 29
  • Boston / New England 27
  • Mid-Atlantic / DC 21
  • Texas 18
  • Colorado / Utah 14
  • Pacific Northwest 14
  • New York Metropolitan Area 13
  • Southern California 13
  • Other U.S. 13

Rest of World Breakdown:

  • Europe 36
  • Canada 23
  • Australia / New Zealand 9
  • Latin America 8
  • Asia 5
  • Middle East / Africa 2

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