OPEXEngine

JUNE 11, 2020

You hear the terms SaaS, subscription, term licenses and perpetual license software tossed around frequently. At OPEXEngine, we pull apart the different nuances of each business model to make sure we are benchmarking companies correctly. In addition, it affects cash flow.

SaaS Payments 52

SaaS Payments Payment Solutions Subscription Payment Features 52

Clouded Judgement

APRIL 12, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 161

Cloud Software Benchmarks Retention 161

User Pilot

OCTOBER 5, 2023

TL;DR The CAC payback period measures the time it takes for a company to recover the money invested in new customer acquisition. This metric helps SaaS companies choose the most effective customer acquisition channels , diagnose inefficiencies in customer retention strategies , and inform pricing decisions.

SaaS Payments 96

SaaS Payments Customer Lifetime Value Payment Solutions Acquisition 96

Stax

FEBRUARY 21, 2024

And because of the digital nature of SaaS businesses and their subscription-based business models, the ability to collect data on how the company is performing is easier and faster than ever. Enter the SaaS Magic Number, which measures the return on sales and marketing spend in generating new subscription revenue.

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

Chart Mogul

OCTOBER 3, 2019

The customer acquisition cost can help you create, measure, and improve a business model that will put your business on the path to profitability. This is where the value of subscription metrics comes to the fore — and specifically the customer acquisition cost (CAC) and the customer lifetime value (LTV). Marketing? .

Acquisition 91

Acquisition Underperforming Technical Team Startup Customer Lifetime Value 91

User Pilot

APRIL 29, 2024

A good SaaS renewal strategy helps drive customer retention , increases the customer lifetime value , and improves your monthly recurring revenue. The renewal rate is calculated as the number of customers who renew their subscription divided by the total number of customers up for renewal at any given period.

SaaS Payments 79

SaaS Payments Business SaaS Payment Solutions 79

Clouded Judgement

JUNE 20, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 161

Cloud Software Benchmarks Scale 161

Clouded Judgement

DECEMBER 20, 2022

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 130

Cloud Software Review Software Benchmarks 130

Baremetrics

SEPTEMBER 15, 2021

If you’re considering whether or not to invest money in a certain area of business, you might want to look at how that area of business is growing. With an understanding of a company's growth rate, investors can often predict future performance and make better investment decisions. What growth rates can you measure with Baremetrics?

SaaS Payments 81

SaaS Payments Payment Features SaaS Payments 81

Kellblog

OCTOBER 30, 2022

One of my new benchmarking themes is that people need to pay more attention to matching their benchmarks with their aspirations. Customer acquisition cost (CAC) ratio of 1.2 Margin profile of 77% subscription, 73% blended. This is all private SaaS companies, including 22% PE-backed and 13% boostrapped. blended, 1.8

Metrics 136

Metrics SaaS Benchmarks Churn 136

User Pilot

MAY 2, 2024

It’s crucial for SaaS businesses because it drives revenue growth, increases customer lifetime value , reduces customer acquisition costs , and fosters positive word-of-mouth marketing. Key metrics to measure customer retention include customer retention rate , customer churn rate , customer acquisition cost, and customer effort score.

Retention 65

Retention Metrics Strategy Scale 65

Tom Tunguz

SEPTEMBER 21, 2014

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. Tableau sells software the old-fashioned way, with perpetual licenses not subscriptions.

Benchmarks 100

Benchmarks SaaS Payments Metrics Scale 100

User Pilot

OCTOBER 15, 2023

SaaS conversion rate optimization is important to create the best customer experience that helps lower the customer acquisition cost and increase MRR. Use benchmarks to monitor your performance to see how well each stage converts. The industry benchmark for this metric sits at 8.5%. Imagesource: Firstpagesage.

SaaS Payments 94

SaaS Payments Payment Methods Payment Solutions Payments 94

ProfitWell

JANUARY 13, 2020

There’s a question that every startup founder, subscription service provider, and ecommerce store owner, needs to ask themselves on a regular basis: Is this the most effective price for my product or service? Especially if you’re trying to get ahead in today’s highly competitive SaaS and subscription markets.

Pricing 52

Pricing Subscription Payment Features Strategy 52

Andreessen Horowitz

AUGUST 22, 2023

Investors often use 3x LTV:CAC as a rough benchmark of a consumer company’s financial health. If your customer lifetime value (LTV) is 3 or more times your customer acquisition cost (CAC) within 5 years, that means your company has efficient returns on sales and marketing spend. and thus COGS (cost of goods sold) structures.

Customer Lifetime Value 76

Customer Lifetime Value Benchmarks Investment Metrics 76

Chart Mogul

OCTOBER 3, 2019

The customer acquisition cost can help you create, measure, and improve a business model that will put your business on the path to profitability. This is where the value of subscription metrics comes to the fore — and specifically the customer acquisition cost (CAC) and the customer lifetime value (LTV).

Acquisition 52

Acquisition Startup Underperforming Technical Team Customer Lifetime Value 52

Tom Tunguz

NOVEMBER 16, 2014

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. New Relic charges by the server - the more computers monitored, the greater the subscription fee.

Benchmarks 100

Benchmarks Underperforming Technical Team Metrics Sales Hiring 100

OpenView Labs

SEPTEMBER 17, 2019

This week we released our third annual Expansion SaaS Benchmarks report. But benchmarks alone are not enough. We’ve got to make the leap from benchmarks to action. Here’s our advice on how to use the benchmark data to grow even faster in 2020. This finding doesn’t come as a major surprise.

Benchmarks 41

Benchmarks Underperforming Technical Team Scale SaaS 41

InsightSquared

MAY 7, 2019

When scaling the business, sales typically averages roughly 30% of revenue, so therefore sales spend is one of the biggest investments a company can make. For these reasons, accurately tracking key sales metrics and benchmarking your performance against peers and market leaders is critical to getting the most out of your sales resources.

Scale 102

Scale Sales Hiring Metrics Sales 102

OpenView Labs

MAY 24, 2021

In OpenView’s 2020 SaaS benchmarks , we pointed out that public markets were starting to take notice of product-led companies. Like OpenView’s coverage of SaaS metrics and benchmarks? Please consider participating in our 2021 Financial and Operating Benchmarks Survey —now open! Atlassian has an R&D:S&M ratio of 2.9:1.

Scale 98

Scale Headcount Sales Hiring Benchmarks 98

Kellblog

NOVEMBER 23, 2022

burn) by failing to invest in the second half of 2023 for growth in 2024. The first block is revenue, optionally split by subscription vs. services. It’s important to see both subscription and overall (aka, blended) gross margin for benchmarking purposes. 2024 and 2025). months vs. quarters) or detail (e.g.,

Technical Review 118

Technical Review Software Review Forecasting Churn 118

OPEXEngine

MAY 18, 2021

ARR is an essential subscription metric that identifies the recurring revenue expected on an annual basis from the subscriber base. When calculating this metric, it is important to only use contracted recurring revenue and not one-time payments from services or any other one-time payment. . Usage Fee-Based ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

CustomerSuccessBox

JUNE 30, 2022

This eventually translates into the importance of keeping track of the User Adoption Rate , especially when you’re running a subscription-based business model. A user adopts the product when the user moves from trying the product to investing in it as a solution. Which acquisition channels have the highest adoption rates?

Business 52

Business SaaS Customer Lifetime Value Benchmarks 52

OPEXEngine

NOVEMBER 17, 2020

Customer Acquisition Cost (CAC). If you are an early-stage or growth SaaS company, most likely all your sales and marketing expenses are invested in acquiring new customers. For monthly subscriptions, it may be the day after the subscription expiration. Take CAC, for example.

Systems Review 52

Systems Review Technical Review Payment Features Scale 52

Baremetrics

MAY 4, 2021

Financial forecasting models are used to predict financial outcomes within a specified area of your business, like recurring revenue or payroll. Adopting this approach provides you with invaluable insights into your subscription-based business, helping you calculate costs, improve budgeting, and allocate resources. The result?

Forecasting 98

Forecasting Benchmarks Finance Subscription 98

Baremetrics

NOVEMBER 2, 2021

To get the most out of the time and money invested into their apps, Shopify App Developers need to track the core metrics of their industry. Monthly recurring revenue (MRR): How much subscription revenue are you bringing in monthly? Customer acquisition cost (CAC): What does it cost to onboard a new customer?

Payment Solutions 98

Payment Solutions Outsourced Development Underperforming Technical Team Metrics 98

Baremetrics

APRIL 21, 2021

Because of the demand for convenience in the digital age, SaaS and subscription businesses are popping up left and right. When it comes to both financial modeling and securing startup financing, SaaS businesses have unique challenges. Key Metrics of SaaS Financing Measuring finance for SaaS companies comes down to a few key metrics.

Finance 98

Finance Scale SaaS Forecasting 98

BrightBack

JUNE 30, 2020

Today Brightback is launching Experience Manager in beta, a way subscription managers can easily implement retention tactics we’ve rigorously tested with direct-to-consumer and SaaS businesses over the past 18 months. While some subscription companies have benefited from the new world order , others have lost most, if not all, their business.

Payments 52

Payments Management Payment Methods SaaS Payments 52

Totango

AUGUST 25, 2022

It increases customer satisfaction and loyalty, driving higher subscription renewal rates, reduced churn, and more sales from upsells and referrals. Invite customers who are nearing subscription renewal to participate in customer satisfaction surveys. Balancing Customer Acquisition Costs and Lifetime Value.

Engagement 96

Engagement Strategy SaaS Scale 96

OPEXEngine

AUGUST 31, 2021

High customer acquisition costs, like some low conversion rates, shouldn’t automatically be considered a bad signal. Although any CFO would like to pair low customer acquisition costs (CAC) with high lifetime value (LTV), instances in which these metrics move in opposite directions aren’t necessarily bad.

Metrics 52

Metrics SaaS Acquisition Business Model 52

Point Nine Land

APRIL 24, 2019

That’s the mantra for most SaaS and subscription companies today. As an industry, we invest millions acquiring and converting customers. For a long time, acquisition has been the primary focus of growth, but it’s come at a cost. This is a guest post by Guy Marion: CEO, Co-founder of Brightback, and member of the #p9family ??.

Retention 76

Retention Strategy Sales Hiring Scale 76

User Pilot

MAY 17, 2021

Measuring product marketing success – Acquisition stage metrics (KPIs) to track. Acquisition stage KPIs to track: CAC, Free Trial signups , or Demos booked. Product marketing KPIs: activation rate, customer acquisition cost, retention rate. Product Marketing Metrics – Acquisition stage metrics (KPIs) to track.

Product Marketing 95

Product Marketing Metrics Customer Lifetime Value Marketing 95

OPEXEngine

JUNE 25, 2020

By early 2020, investment in the SaaS industry was at record highs and expected to hit even higher peaks. We compared benchmarks for smaller and larger private SaaS companies coming into 2020, against the same metrics five years ago in our 2015 benchmarking and focused the comparison on cash flow. In early Feb.,

Benchmarks 52

Benchmarks SaaS Airlines Travel 52

OPEXEngine

JANUARY 14, 2020

Many factors drive the high-growth of SaaS companies, including higher market adoption of SaaS and the structural advantages of the recurring subscription revenue model – see Why SaaS Companies Grow Faster. If a company expands into a new geography, the benefits of that investment in new sales could take years.

SaaS Payments 59

SaaS Payments SaaS Scale Customer Lifetime Value 59

OPEXEngine

NOVEMBER 21, 2019

Resource allocations should be fine-tuned by looking at how the Return on Investment (ROI) can be impacted by changing resource allocations across each of the major functions, especially sales and marketing, as well as product investments. ROI is calculated as: ROI = (result or benefit of investment/investment) / investment.

Sales Hiring 45

Sales Hiring Underperforming Technical Team Scale Customer Lifetime Value 45

OPEXEngine

FEBRUARY 22, 2022

Being “stuck in the middle” drives SMM SaaS companies to invest in one of two strategies. Instead, SMM SaaS companies will leverage Inside Sales and Channel Partners coupled with digital marketing to drive down Customer Acquisition Costs. SMM SaaS Go-To-Market Strategy. eCommerce Marketplaces.

SaaS Payments 52

SaaS Payments Payment Services Payment Methods Marketplace as a Service 52

Tom Tunguz

OCTOBER 15, 2013

How much should the business invest in managing churn? Our SaaS benchmarks from earlier this week tell us the average public SaaS company has a 3% monthly revenue churn or a 2 year lifetime and a sales efficiency of 0.8, It’s an important question and one that arises most often as a SaaS startup scales.

Churn 100

Churn Startup Management Scale 100