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

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

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. HubSpot is the second fastest SMB SaaS company to IPO yet, achieving the mark within 8 years. Only WIX, CTCT and RNG had smaller figures of $86, $265 and $352.

Benchmarks 113

Benchmarks SMB Metrics SaaS 113

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

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. Contracted expansion revenue i.e. add-ons or upgrades that affect the annual subscription price of the customer should be included. . Usage Fee-Based ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

OPEXEngine

JUNE 11, 2020

Pros and Cons: SaaS SMB vs. Enterprise Models. SaaS companies selling in the SMB market are structured operationally very differently from SaaS companies selling in the enterprise market. At OPEXEngine, we pull apart the different nuances of each business model to make sure we are benchmarking companies correctly.

SMB 59

SMB SaaS Benchmarks Subscription 59

Kellblog

FEBRUARY 13, 2022

Our average sales price (ASP) , say $100K. For extra credit, our segment-specific ASP: SMB opportunities get valued at our SMB ASP of $25K and enterprise ones get valued at our enterprise ASP of $100K. benchmark against) others who use placeholder values? Some semi-random proxy value , say $25K. Zero dollars.

Sales 132

Sales SMB Systems Review Forecasting 132

User Pilot

JULY 18, 2023

Price increases. It also helps in identifying short-term trends, setting long-term goals, benchmarking performance, and making critical decisions to improve customer retention. If you’re an early-stage startup or SMB, expect an average annual churn of 10% to 15%. Price increases: Price increases are tricky.

Churn 95

Churn Payments SaaS Payments Payment Solutions 95

Tom Tunguz

JUNE 12, 2014

To answer those questions, I’ve pulled together data from a basket of 46 publicly traded SaaS/Cloud companies and segmented them based on their average annual customer value (ACV) into three buckets: SMB ( =$10k to $100k). The median SMB SaaS startup spends significantly less on sales and marketing through year 4 of their lives.

Startup 100

Startup SMB Sales Hiring Acquisition 100

ChurnZero

OCTOBER 15, 2021

The existence of this benchmark shows how far CS has come, but there’s still further to go. You may do things with your pricing and packaging that don’t feel right but allow you to do some fun (misleading) math that gets you in a better spot. Why NRR benchmarks are dangerous. Be prepared to be benchmarked.

Customer Success 97

Customer Success Benchmarks Scale Underperforming Technical Team 97

OpenView Labs

MAY 29, 2020

Not even Burry was immune to investor redemptions in the year leading up to the great financial crisis despite his repeated pleas to be benchmarked over 5+ years. Long-term investors piled into Workday but their expected results were priced in 5 years ahead of time and the stock didn’t budge. 35% for the broader SaaS index).

Marketing 52

Marketing SMB Benchmarks Pricing 52

ChurnZero

MARCH 18, 2022

If you tell me that we have this awesome land-and-expand model, we go in with a really low price, and then we have a dedicated expansion team that does these upsells, and I say, “Wow, what an amazing story. The only way they get increases is through price increases. Why aren’t you consumption based in pricing?

Customer Success 98

Customer Success Metrics SaaS Banking 98

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. The other option is to outperform lower-cost competitors by gaining market share, usually by lowering their price point to achieve virality.

SaaS Payments 52

SaaS Payments Payment Services Payment Methods Marketplace as a Service 52

Sales Hacker

JUNE 7, 2018

Enterprise versus SMB Sales Velocity. The example above is a classic scenario of an enterprise seller side-by-side with an SMB seller who both achieve the same sales velocity outcome, albeit through different approaches. Do I have a clear understanding of the value metrics that drive the pricing of our products upwards?

Sales 50

Sales SMB Enterprise Metrics 50

SaaStr

OCTOBER 31, 2019

Contrast that with companies that might also sell into the SMB segment of the market where the ASPs, the average deal sizes are lower. SMB businesses just go out of business much more frequently, and so their gross retention numbers are going to be lower. We like to recommend that you manage your runway and you buffer for contingency.

Cloud 100

Cloud Scale AWS Machine Learning 100

OPEXEngine

NOVEMBER 17, 2020

I was speaking recently with a new FP&A director at a SaaS company, and we reviewed the company’s KPIs compared to benchmarks. As a result, the company was comparing itself to companies selling millions of low-priced subscriptions in a high-volume, transactional SMB model.

Systems Review 52

Systems Review Technical Review Payment Features Scale 52

Baremetrics

JANUARY 24, 2021

The benchmark customer churn for SaaS for SMBs is 5%. A year earlier we’d launched the MVP of the model allowing SMB customers to input a credit card to get access to the platform, but we hadn’t had a chance to dedicate time or resources to optimizing a proper SaaS onboarding funnel. At 19.20%, we were dramatically off-base.

Churn 71

Churn SaaS Payments Payment Methods Payment Solutions 71

SaaStr

MARCH 1, 2019

How does this differ when comparing enterprise to SMB? How does this differ when comparing SMB to enterprise? Is it fair to always surmise that when serving SMB one will always have a higher rate of churn? Assisted vs unassisted: What does Tom believe are the leading benchmarks for both? What are the dangers there?

Scale 114

Scale SMB Sales Recruiting Sales Hiring 114

SaaStr

JUNE 13, 2019

And they were broken down roughly a third, a third, a third by targeting the SMB, the mid-market, and the enterprise. The first goal is to share with you benchmarks. We believe benchmarks are really useful to help you build your business, because they provide good goalposts for financial planning and for goal setting.

Scale 202

Scale SMB Sales Hiring Payment Services 202

Tom Tunguz

FEBRUARY 6, 2019

These businesses sell at every price point and sell to every operational buyer. Share benchmarks to calibrate your startup’s free trials. In the SMB, month to month is more common. This is true across every price point. They span single digit ARR businesses to publicly traded SaaS companies.

Payment Services 274

Payment Services SaaS Payments SMB Benchmarks 274

How SaaS Works

OCTOBER 7, 2019

For example, getting a list of soccer parents when we have built a swim team management tool does not make sense; neither does targeting ads to Fortune 500 when we only sell into SMB. The annual B2B Content Marketing Benchmarks, Budgets, and Trends report ( 2019 ) focuses on B2B insights.

SaaS 40

SaaS Social Media Sales Funnel Content Marketing 40

Sales Hacker

SEPTEMBER 11, 2018

The optimal pricing strategy to IPO. Tomasz is a managing director at Redpoint Ventures, really well known in the SaaS world for a lot of the data and analysis he’s done, and for benchmarking great companies. If you missed episode 23, check it out here: PODCAST 23: Optimizing Sales Productivity to Drive Exponential Growth.

Scale 42

Scale SaaS Investment Construction 42

OpenView Labs

DECEMBER 17, 2020

Four years ago, OpenView released the first annual Expansion SaaS Benchmarks Report in order to fill a critical data gap for SaaS founders and CFOs who had a lot of questions about optimal growth rates, burn levels, gross margins and other key data points. With this year’s SaaS Benchmarks Report, we can now validate that hypothesis.

Benchmarks 52

Benchmarks Scale SaaS Software Review 52

Chart Mogul

SEPTEMBER 15, 2023

Benchmarks across the PLG user journey The hardest part of PLG might actually be… marketing?! Source A Framework and Benchmarks To Assess Revenue Quality by Frederik Hagenauer, Speedinvest The following is supposed to be a quick outline of factors that a VC may look at to assess your traction. Forget about Threads. Who Owns “Growth”?

Scale 52

Scale Underperforming Technical Team Sales Hiring SaaS 52

SmartKarrot

FEBRUARY 9, 2022

In other words, the percentage of customers that a business is able to retain at the existing price point or the contract value is called its Gross Revenue Retention. 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.

Retention 10

Retention Revenue SaaS Benchmarks 10

SaaStr

NOVEMBER 1, 2019

They have funding from some of the best in the business including the likes of Benchmark, Sequoia, Redpoint and Marc Benioff, just to name a few. How should early-stage startups approach the topic of pricing? Does Dave agree with David Skok on the need for more than 1 variable pricing mechanism? Episode No. Episode No.

Technical Review 142

Technical Review Development Team Review Scale Software Review 142

SaaStr

NOVEMBER 19, 2019

So I went down the hall, met with the head of marketing, and I discovered a lot about in bound SaaS, about SMB, the importance of building this machine as I call it now that generates all these lovely leads. In fact, we were below benchmarks for SaaS companies. Then I went over to the sales department. How can you sell more product?

Scale 169

Scale SMB VP of Engineering Leadership 169

OPEXEngine

SEPTEMBER 10, 2020

Here are a few of the trends that we are hearing about from CFOs, investors and lenders: Flexible pricing models and payment terms: A couple of things are happening here. Obviously, considerations need to be made about how any changes in pricing/packaging and subscription terms will affect retention rates.

Payment Services 59

Payment Services SaaS Payments Trends Payment Solutions 59

SaaStr

JANUARY 3, 2020

How does this differ when comparing enterprise to SMB? How does this differ when comparing SMB to enterprise? Is it fair to always surmise that when serving SMB one will always have a higher rate of churn? Assisted vs unassisted: What does Tom believe are the leading benchmarks for both? What are the dangers there?

SMB 26

SMB Sales Recruiting Sales Hiring Scale 26

Chart Mogul

FEBRUARY 19, 2021

Your net retention, on the other hand, indicates whether the value of your product and your pricing are aligned with the success of your customers. Benchmarking provides the best answer to this question. Naturally, retention varies across niches (consumer vs. B2B software) and segments (SMB vs. enterprise).

Retention 72

Retention Churn Benchmarks SMB 72

Sales Hacker

NOVEMBER 15, 2017

Average Sale/Selling Price. Average Sale/Selling Price (ASP) is a term that may refer to 1) the average price of a product in a given market or channel or 2) the price a certain class of products or services is commonly sold for. Pricing/Price. Account Development Representative. Account Executive.

Scale 99

Scale Payment Methods Sales Recruiting SaaS Payments 99

Chart Mogul

FEBRUARY 19, 2021

Your net retention, on the other hand, indicates whether the value of your product and your pricing are aligned with the success of your customers. Benchmarking provides the best answer to this question. Naturally, retention varies across niches (consumer vs. B2B software) and segments (SMB vs. enterprise).

Retention 52

Retention Churn Benchmarks SMB 52

SaaStr

JULY 26, 2019

How does this make Eric change the way he approaches benchmarking, capital allocation, and growth? ” Is it SMB or is it Enterprise? You make that decision based on the fact that your profile fits either an SMB or Enterprise. Then, you can decide, is it a high volume play in the SMB? What has changed?

Sales Hiring 141

Sales Hiring Scale SaaS Payments Payment Services 141

SaaStr

JULY 30, 2020

How does this differ between SMB and enterprise? Yeah, hey, I was selling halftime before, and I would close about three deals a month at this average selling price. This is why you see SMB focused sales organizations like Zenefits, or Yelp, or Yaxed, or what have you. I’m not even a professional seller.

Part-Time VPE 194

Part-Time VPE Scale Sales Recruiting Sales Hiring 194

Intercom, Inc.

JUNE 6, 2019

Today, we’ve aligned that evolution with how we price. And so, for products that are solely self-serve (and solely SMB or very small business), it can make less sense for us to go after it, right? So for the most part, we proactively go after mid-market enterprise companies like Segment and Invision. Do you know who MadKudu is?

Scale 190

Scale Branding Underperforming Technical Team Enterprise 190

OPEXEngine

MAY 12, 2020

Based on historical experience, we forecast large enterprise-focused vendors sustaining renewal rates significantly better than SMB focused models, and subscriptions priced on infrastructure/data levels sustaining better than seat-based models.”.

Technical Review 59

Technical Review SaaS Software Review Sales Hiring 59

SaaStr

AUGUST 15, 2020

It’s like we’re going to put pictures online with a price and you’re going to start marketing it and that’s the thing. We are still heavily oriented to SMB and to entrepreneurs. We will do some support work, some aggregate benchmarking, things like that, that we can provide. ” Right?

Payment Methods 190

Payment Methods Merchant Services Scale Payments 190