SaaStr

DECEMBER 27, 2020

Those of us who’ve been around a while think of New Relic as a freemium and almost SMB tool, but today 77% of their revenue comes from accounts greater than $100k. If New Relic had even 120% NRR, it’s growth rate with the exact same rate of new customer acquisition would be 137% instead.

Scale 292

Scale Outsourced Development SMB Cloud 292

Clouded Judgement

JUNE 9, 2023

Very healthy new business (new customer) acquisition. Most public companies don’t report net new ARR, so I’m taking an implied ARR metric (quarterly subscription revenue x 4). Companies that do not disclose subscription rev have been left out of the analysis and are listed as NA.

Trends 130

Trends Cloud Azure AWS 130

Clouded Judgement

MARCH 22, 2024

For SaaS businesses that target smaller SMB customer segments, gross retention is typically in the mid to low 80’s with net expansion in the ~105% range. And once a customer has paid back the initial acquisitions costs to acquire it, all future streams of revenue can loosely be described as a cash flow annuity.

AI 183

AI Revenue Cloud Technical Advisors 183

BrightBack

APRIL 6, 2020

The subscription industry is facing intense change as the landscape matures and companies race to stop customer churn related to the Covid-19 pandemic. The subscription industry is entering a retention-led phase of growth. The subscription industry is entering a retention-led phase of growth.

Subscription 59

Subscription Payment Features Retention Payment Methods 59

Clouded Judgement

DECEMBER 21, 2023

For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com). To calculate implied ARR I take the subscription revenue in a quarter and multiply it by 4.

Cloud 177

Cloud Software Benchmarks Retention 177

OPEXEngine

MAY 18, 2021

SaaS metrics are viewed differently at different stages of growth and for different sales models, primarily whether a company is selling into an SMB or enterprise marketplace. ARR is an essential subscription metric that identifies the recurring revenue expected on an annual basis from the subscriber base. Usage Fee-Based ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

SaaStr

JANUARY 24, 2024

Scaling Enterprise vs. Mid-Market Sales: Key Takeaways from Calendly It’s a common blueprint to start with SMB and mid-market accounts as your ideal customers. As a subscription business, you should always be growing, but the rate of growth wasn’t where they wanted it to be. The result?

Scale 219

Scale Sales Hiring Scaling Revenue 219

SaaStr

NOVEMBER 2, 2019

How does Krish think about purely serving the SMB market? How does he think about the mortality rate of SMBs? How does Krish think your customer acquisition and GTM strategy has to change with the movement from SMB to enterprise? Billion story from its launch in 2008 to its 2018 acquisition by Recruit Holdings.

Scale 132

Scale SaaS Payments Sales Recruiting Payment Services 132

Clouded Judgement

SEPTEMBER 12, 2023

For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com). To calculate implied ARR I take the subscription revenue in a quarter and multiply it by 4.

Cloud 169

Cloud Software Benchmarks Retention 169

FastSpring

SEPTEMBER 2, 2020

Depending on what calculation you use, LTV can paint an honest picture of whether your customers are spending and staying long enough to cover acquisition costs and hopefully—make you a profit. Tracking your LTV/CAC ratio allows you to spend the right amount on customer acquisition while still making a profit.

Scale 146

Scale Payment Methods Payments SaaS Payments 146

Clouded Judgement

APRIL 12, 2023

For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com). To calculate implied ARR I take the subscription revenue in a quarter and multiply it by 4.

Cloud 161

Cloud Software Benchmarks Retention 161

OPEXEngine

NOVEMBER 17, 2020

Customer Acquisition Cost (CAC). Especially now, since the onset of the pandemic, most companies have shifted some acquisition resources to customer retention—especially in 2020, look at what was spent on acquiring new customers and back-out anything that doesn’t apply. Take CAC, for example.

Systems Review 52

Systems Review Technical Review Payment Features Scale 52

Clouded Judgement

JUNE 20, 2023

For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com). To calculate implied ARR I take the subscription revenue in a quarter and multiply it by 4.

Cloud 161

Cloud Software Benchmarks Scale 161

Clouded Judgement

DECEMBER 20, 2022

For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. I consider >120% best in class for companies selling to SMBs (like Bill.com). To calculate implied ARR I take the subscription revenue in a quarter and multiply it by 4.

Cloud 130

Cloud Software Review Software Benchmarks 130

OPEXEngine

JUNE 23, 2021

The CAC Payback Period, also known as Months to Recover Customer Acquisition Cost (CAC), measures the number of months of subscription revenue it takes to recover the costs to acquire one customer. Measuring Customer Acquisition Efficiency. I would say that both are good metrics; each gives you slightly different information.

Benchmarks 52

Benchmarks Acquisition SMB Software Review 52

SaaSX

FEBRUARY 14, 2021

Product-led growth is a very specific approach to go-to-market that relies on a self-service customer acquisition channel—where people buy the product without ever talking to a person from the company. It may be that they just can’t sign up online because they need to generate a PO or receive an invoice to pay.

Scale 59

Scale Payment Features SMB Acquisition 59

SaaStr

MARCH 20, 2020

318: The first step in success with SMB clients is to recognize that it’s not a one size fits all scenario. Companies need a specialized approach for SMB accounts, different than the tactics used for Enterprise. I look at the growth of our organic acquisitions. This episode is sponsored by TaxJar.

SMB 185

SMB Scale Startup Marketplace as a Service 185

Baremetrics

JANUARY 24, 2021

Anyone managing a SaaS or subscription business is aware of customer churn. This is when the good stuff starts to happen within a subscription business In this post I’m going to share the strategy and steps we followed to reduce our monthly customer churn by over 70%, and explain how we positioned Nudge Coach for efficient, long-term growth.

Churn 71

Churn SaaS Payments Payment Methods Payment Solutions 71

Tom Tunguz

JULY 14, 2013

For example, Zuora enables subscription billing; Expensify manages employee expenses; ZenDesk builds customer support systems. At the outset, the company targets the less sophisticated SMB segment which doesn’t demand the compliance, heavy security and integration features needed by enterprise customers.

Sales Hiring 100

Sales Hiring Venture Capital SaaS Machine Learning 100

Sales Hacker

APRIL 10, 2018

The SMB segment—going upstream vs. downstream. Pro-user, SMB, Enterprise, this requires a specific Go To Market strategy. SMB/Group like – selling applications using an annual/monthly/usage contract. The SMB Segment: Going Upstream vs. Downstream. The importance of the SMB segment.

SMB 72

SMB Strategy Outsourced Development Marketing 72

OPEXEngine

FEBRUARY 22, 2022

SMB customers will want high-touch sales engagement and service delivery but SMM SaaS companies will likely not have the budget necessary to justify providing this level of sales support. Instead, SMM SaaS companies will leverage Inside Sales and Channel Partners coupled with digital marketing to drive down Customer Acquisition Costs.

SaaS Payments 52

SaaS Payments Payment Services Payment Methods Marketplace as a Service 52

CustomerSuccessBox

MAY 25, 2021

For SaaS companies selling into Small and Medium Enterprises (SMB) Anything over 90% is a good NRR whereas, for Enterprise SaaS, 125% is considered a good NRR. For SMB customers, a GRR should be between 50-~80% whereas for Enterprise customers it should be between 70- 90%. Gross Retention Rate(GRR). Conclusion.

Retention 52

Retention Metrics Outsourced Development SMB 52

Casey Accidental

NOVEMBER 13, 2019

If driving more customers was your customers’ #1 need, and that’s not what you helped them with, you probably didn’t build a very successful business, or the problem of solving customer acquisition for that market is very difficult. Customer acquisition was always a key value proposition, and they delivered on it.

Marketplace as a Service 106

Marketplace as a Service Business Model Business Underperforming Technical Team 106

ChurnZero

MARCH 18, 2022

Yours is, you have a super low Customer Acquisition Cost (CAC) so you can justify that with the super high churn. It’s subscription growth margin, which plays into CAC payback period. CAC payback period is how many months of subscription gross profit does it take to pay back your customer acquisition costs?

Customer Success 98

Customer Success Metrics SaaS Banking 98

ChurnZero

JUNE 11, 2021

A customer health score is a value that indicates the likelihood that a customer will renew their subscription or service with your company. Another example is creating a health score based on tiered implementation: SMB onboarding versus Enterprise onboarding. Were there acquisition scenarios? What’s a Customer Health Score?

Software Review 96

Software Review Systems Review Scale Underperforming Technical Team 96

Intercom, Inc.

DECEMBER 13, 2018

We are going from having an enterprise business to having a mid-market business to investing in an SMB business. With our go-to-market strategy, as you said, we turned the playbook upside down and we’re going from the enterprise to mid-market to SMB. Ultimately, the product works for every company.

Scale 151

Scale Marketplace as a Service Mobile Sales Hiring 151

FastSpring

APRIL 4, 2024

And so it’s like this promise of almost like automated acquisition and upgrades I feel like underpins the kind of core value people put forth with PLG. It sounded like one financial benefit of that approach is new ARR acquisition, right. You think that’s a fair way to look at it? Or how might you think of that?

Scale 147

Scale Sales Payment Methods Merchant Services 147

ChurnZero

JANUARY 4, 2019

“In 2019 there will be an increase in subscription fatigue. When even your electric toothbrush is pushing you towards a subscription model, we can expect to see an increase in subscription fatigue. If we’re not at peak SaaS, we’re probably close to it. ” – Nick Vibert, Customer Success Officer, SmartrMail.

Customer Success 73

Customer Success SaaS Payments Payment Services Payment Solutions 73

CustomerSuccessBox

FEBRUARY 28, 2022

You mostly need repeat purchases to get payments with a subscription model and it is easier to impress existing customers than starting all over to acquire new ones. Best practices: Consumption vs subscription. Meaning they have a good customer retention rate who are paying for subscriptions, have upsells and expansions as well.

Retention 52

Retention SaaS Payments Payments Payment Methods 52

Intercom, Inc.

JULY 29, 2021

SaaS is the subscription business. We look at our acquisition rates. We have SMB mid-market enterprise. SaaS is the subscription business. Mark believes he has what he calls a duty of care when it comes to people who come working for him — to make them successful, help them grow. We look at our retention rates.

Sales Hiring 223

Sales Hiring Scale Sales Recruiting Underperforming Technical Team 223

Neil Patel

DECEMBER 16, 2021

Another easy way to find keywords is to check for searches that show up in your Google Analytics Acquisition reports. Also, be sure there’s an email subscription option on each of your web properties. How can I grow my SMB using online marketing? It is a great resource to help you research relevant keywords to rank for.

Social Media 145

Social Media Strategy Marketing Business 145

SaaStr

AUGUST 9, 2019

How does Vikas see the space play out in the coming years when it comes to acquisitions? You’ve seen SalesForce with a number of significant acquisitions in the last 12 months, as an example. It’s not an SMB where you’re getting volumes of 100 a day. Does this not lead to a consolidatory environment?

SaaS Payments 137

SaaS Payments Cloud Technical Review Scale 137

ChurnZero

JUNE 19, 2020

The debt markets did not lend into the software industry up until the mid-2000s, and it was about the collateral of the recurring maintenance and support stream. Now, it’s the recurring stream that’s related to the subscription revenue. We’ve had a hard time with the businesses that sell into the SMB.

SaaS Payments 72

SaaS Payments Retention Metrics Payment Solutions 72

Brian Balfour

JULY 18, 2017

subscription e-commerce) typically live here. You can have a business here, but your acquisition strategy ends up a patchwork of bits and pieces from a lot of different channels rather than owning one channel. One step over on the spectrum you have slightly higher ARPU businesses. Businesses with transactional models (i.e.

Growth Hacking 65

Growth Hacking B2B B2C SMB 65

ChurnZero

AUGUST 24, 2018

Because you certainly are going to want to make sure that your subscription product is priced so your customers can adopt to it. The big thing that you probably want to focus on is that recurring revenue stream. It’s really more of an executive team decision to transition. Also, are you going to continue to sell perpetual?

Finance 61

Finance Customer Success Scale Customer Lifetime Value 61

Brian Balfour

MARCH 21, 2017

Different products and business models require different ways to measure customer acquisition cost , and other key metrics that often show up on benchmark reports as uniform. You might get retention numbers, for example, but you have no idea what their acquisition looks like. They usually just ask, “What is your CAC?”

Benchmarks 40

Benchmarks Business Model Acquisition Subscription 40

ChurnZero

JANUARY 4, 2019

“In 2019 there will be an increase in subscription fatigue. When even your electric toothbrush is pushing you towards a subscription model, we can expect to see an increase in subscription fatigue. If we’re not at peak SaaS, we’re probably close to it. ” – Nick Vibert, Customer Success Officer, SmartrMail.

Customer Success 49

Customer Success SaaS Payments Payment Services Payment Solutions 49