Tom Tunguz

MARCH 18, 2019

This is the value of a cohort a year later inclusive of churn and expansion. Sales efficiency is a measure of the marginal gross profit generated by a dollar invested in sales and marketing. In terms of price point, PagerDuty is right around the $10,000 revenue per customer per year.

Metrics 192

Metrics Benchmarks Software Review Engineering 192

Clouded Judgement

APRIL 12, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn).

Cloud 161

Cloud Software Benchmarks Retention 161

Clouded Judgement

JUNE 20, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. The market is clearly pricing in lower rates + reacceleration of growth. Not surprisingly, these benchmarks match up relatively well with the numbers public companies reported. net retention and CAC payback).

Cloud 161

Cloud Software Benchmarks Scale 161

Tom Tunguz

SEPTEMBER 10, 2013

Benchmarking is a great tool, if you can get access to representative data. Pacific Crest and David Skok have released a fantastic survey benchmarking SaaS metrics for early and growth stage companies. Below is my list of the six most important benchmarks and observations from that report. Median Monthly Revenue Churn is 0.75%.

Benchmarks 108

Benchmarks Startup Sales Hiring Compensation 108

Clouded Judgement

DECEMBER 20, 2022

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn).

Cloud 130

Cloud Software Review Software Benchmarks 130

OpenView Labs

NOVEMBER 12, 2020

When we were preparing the 2020 expansion SaaS benchmarking survey, our biggest question was: “How did COVID-19 and the economic downturn affect private SaaS companies?” Despite an uptick in logo churn attributable to COVID-19, net dollar retention was as strong as ever. Bring back your pricing and packaging initiative.

Benchmarks 52

Benchmarks Scale Technical Review SaaS 52

ProfitWell

OCTOBER 16, 2019

It’s the question on every SaaS founder’s lips: Is my churn rate too high? A “good” churn rate for one company might be terrible for another. Worse, comparing average churn rates across different markets and industries will leave you mired in confusing statistics and contradicting studies. What is the average churn rate?

Churn 55

Churn SaaS Payments Payments Payment Methods 55

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? Finding an effective price helps you solidify your position, build trust with your customers, and achieve your business goals.

Pricing 52

Pricing Subscription Payment Features Strategy 52

ChurnZero

JUNE 9, 2023

CS team members at all levels would do well to learn about metrics that can better articulate the effect they have on churn, renewals, and expansions. This will help the finance team relate proposed investments aimed at supporting renewal with business growth. A healthy benchmark is a 95% renewal rate in a given period.

Finance 98

Finance Metrics Customer Success Headcount 98

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. Book the demo to see how!

SaaS Payments 105

SaaS Payments Customer Lifetime Value Payment Solutions Acquisition 105

OpenView Labs

FEBRUARY 4, 2020

Segment CEO and Co-founder Peter Reinhardt was recently reflecting on what were his top lessons learned from changing packages and pricing. While Segment may be an extreme case, the business is far from unique in learning that it was leaving money on the table due to its pricing. Pricing Is Your Best Shot at Growing 25% Faster.

Pricing 60

Pricing Scale Technical Review Software Review 60

OpenView Labs

SEPTEMBER 8, 2021

2021 has proven to be the year of usage-based pricing. . 45% of expansion stage SaaS companies now say they have a usage-based or consumption-based pricing model, according to data from OpenView’s forthcoming 2021 Finance and Operations benchmarks report. . Product: Treat product investments as a revenue-generating expense.

Pricing 64

Pricing Customer Success Scale Compensation 64

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. In industry parlance, this is called negative revenue churn. But churn doesn’t seem to be a concern for New Relic.

Benchmarks 100

Benchmarks Underperforming Technical Team Metrics Sales Hiring 100

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. The company went public in 2013 and we’ll use data from their S-1 through 2013 to benchmark the business.

Benchmarks 100

Benchmarks SaaS Payments Metrics Scale 100

Tom Tunguz

AUGUST 26, 2014

HubSpot’s target customer base are SMBs and with this price point, it’s possible to support a profitable inside sales model if the team is very efficient. To grow at that pace, HubSpot has been investing aggressively in sales and the company is widely respected for its content marketing prowess.

Benchmarks 108

Benchmarks SMB Metrics SaaS 108

OpenView Labs

SEPTEMBER 23, 2019

We’re living in a remarkable era for investing. Enduring business (think Cisco, GE, Walmart) must demonstrate the ability to repeatedly generate predictable earnings – turning the massive revenue scale they’ve achieved into shareholder returns (via share price expansion and dividends). How Do I Know What My Benchmarks Are?

Benchmarks 40

Benchmarks Data SaaS Scale 40

User Pilot

MARCH 26, 2024

Akkio – the best digital analytics solution for churn prediction. Pricing Here's an overview of Userpilot's pricing plans: Starter. You can take these insights to boost conversions, increase retention, and mitigate customer churn. Pricing Google Analytics operates a freemium model of pricing.

Artificial Intelligence 52

Artificial Intelligence SaaS Payments Payment Solutions Payment Services 52

User Pilot

MARCH 26, 2024

Akkio – the best digital analytics solution for churn prediction. Pricing Here's an overview of Userpilot's pricing plans: Starter. You can take these insights to boost conversions, increase retention, and mitigate customer churn. Pricing Google Analytics operates a freemium model of pricing.

Artificial Intelligence 52

Artificial Intelligence SaaS Payments Payment Solutions Payment Services 52

User Pilot

MARCH 26, 2024

Akkio – the best digital analytics solution for churn prediction. Pricing Here's an overview of Userpilot's pricing plans: Starter. You can take these insights to boost conversions, increase retention, and mitigate customer churn. Pricing Google Analytics operates a freemium model of pricing.

Artificial Intelligence 52

Artificial Intelligence SaaS Payments Payment Solutions Payment Services 52

User Pilot

MARCH 26, 2024

Akkio – the best digital analytics solution for churn prediction. Pricing Here's an overview of Userpilot's pricing plans: Starter. You can take these insights to boost conversions, increase retention, and mitigate customer churn. Pricing Google Analytics operates a freemium model of pricing.

Artificial Intelligence 52

Artificial Intelligence SaaS Payments Payment Solutions Payment Services 52

User Pilot

MARCH 26, 2024

Akkio – the best digital analytics solution for churn prediction. Pricing Here's an overview of Userpilot's pricing plans: Starter. You can take these insights to boost conversions, increase retention, and mitigate customer churn. Pricing Google Analytics operates a freemium model of pricing.

Artificial Intelligence 52

Artificial Intelligence SaaS Payments Payment Solutions Payment Services 52

Stax

FEBRUARY 21, 2024

By analyzing the SaaS Magic Number, SaaS companies can determine how well their revenue-driving investments (in sales, marketing, and customer retention) are translating into actual revenue growth. Focus on lowering marketing costs and optimization before investing more. How Do You Calculate the SaaS Magic Number?

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

Tom Tunguz

JUNE 8, 2015

ServiceNow reports its upsell rate, which is equivalent to a negative net churn. ServiceNow commands 30%+ annual price increases from its customers, an impressive figure. ServiceNow has mostly operated unprofitably, investing as much capital as it can into growth. ServiceNow has recorded a better than 1.0 at $93M in revenue.

Benchmarks 108

Benchmarks Metrics SaaS Investment 108

Baremetrics

SEPTEMBER 9, 2021

When a SaaS product or service has been developed, tracking the ROI (return on investment) involves always keeping revenue vs. profit at the top of mind. The reason is simple: revenue does not represent your company’s “true” return on investment. However, these two financial terms are sometimes misrepresented in the books.

Payments 103

Payments Revenue Payment Services SaaS Payments 103

Clouded Judgement

AUGUST 25, 2023

The purpose of the detailed information is to help investors (both institutional and retail) make informed investment decisions. There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against current cloud businesses.

Benchmarks 246

Benchmarks Artificial Intelligence Data Software Review 246

FastSpring

SEPTEMBER 16, 2022

Valid question, and I’m going to answer it — because the reasons (plural) we have for investing in this initiative may not be as simple as the most cynical among us assume. Companies don’t just invest in new programs to benefit random business people on the internet; they do it because it serves their own business in some way.

SaaS Payments 124

SaaS Payments Payment Solutions Merchant Services Software Review 124

ProfitWell

NOVEMBER 15, 2019

So I’ll unpack some of our favorite tools that cater to certain needs—analytics, accounting, retention, pricing, and more. There are hundreds of SaaS tools online that will help your business increase retention and decrease churn. From optimizing your pricing to CRM—there’s a tool tailored for all your SaaS needs. Analytics.

Retention 56

Retention Pricing SaaS Payments Payment Methods 56

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

OPEXEngine

MAY 18, 2021

Contracted expansion revenue i.e. add-ons or upgrades that affect the annual subscription price of the customer should be included. . Conversely, EBITDA is more highly valued for a $500M company than for a $5M recurring revenue company were investing in Sales & Marketing, and systems to scale the business are critical to future success.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

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. Each sales rep has their own way of finding new leads.”.

Benchmarks 41

Benchmarks Underperforming Technical Team Scale SaaS 41

Clouded Judgement

APRIL 4, 2024

The purpose of the detailed information is to help investors (both institutional and retail) make informed investment decisions. There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against current cloud businesses.

Benchmarks 117

Benchmarks Data Cybersecurity Cloud 117

Baremetrics

AUGUST 1, 2021

Optimize the pricing page 5. Speaking with respect to the SaaS customer acquisition costs industry benchmark , here's what the data tells us: Ideal LTV:CAC Ratio: Growing SaaS businesses should aim for a ratio of 3:1 or higher, considering that a higher ratio translates to greater sales and better marketing ROI. The Bottom Line.

Acquisition 98

Acquisition Strategy SaaS Underperforming Technical Team 98

SmartKarrot

MAY 28, 2020

Churn rate is the rate of customers or revenues lost by a company in a given time period. It is a common belief in the SaaS industry that the acceptable SaaS churn rate benchmarks is around 5% annually. There are many factors that decide what is an acceptable benchmark and what exceeds it. The kind of product.

Benchmarks 10

Benchmarks Churn Technical Review SaaS 10

Baremetrics

MAY 4, 2021

This way of predicting financial outcomes can help decision-makers understand make forecasts based on the relationships between prices and costs, supply and demand, and other factors that affect each other. This can help you figure out how your operation compares to other similar businesses, and you can use this method for benchmarking.,

Forecasting 98

Forecasting Benchmarks Finance Subscription 98

OpenView Labs

DECEMBER 21, 2020

Priceless Pricing Advice from the Smartest Operators in SaaS. If you’re owning pricing for the first time, this post is for you—it’s full of brilliant advice from experts at SurveyMonkey, Intercom, Aspireship, Zenefits and more. Give this metric its own headline in your next investment deck, executive dashboard or monthly update.

Scale 53

Scale Benchmarks Forecasting Consulting 53

ChurnZero

MARCH 18, 2022

Q: Should you be worried if your annual logo churn is between 25% to 30%?*. Their report shares the results from a survey of private SaaS companies which KBCM Technology Group’s software investment banking team conducted in June and July 2021. Then, you can stop counting them as churn. That’s an alarming level churn.

Customer Success 98

Customer Success Metrics SaaS Banking 98

Chart Mogul

NOVEMBER 13, 2020

VCs and day traders alike know the challenge of deciding whether to invest in a software company. So, when an investor is deciding whether to invest in a SaaS company, they are essentially making a bet on the future. Benchmarking, i.e. comparing yourself to peers, is the best way to approach this question. Click To Tweet.

SaaS 69

SaaS Benchmarks Churn Metrics 69