At the expansion stage, software as a service (SaaS) companies are generally working toward one of two common goals: fast growth or profitability at a sustainable growth rate. The problem, however, is that they often wind up investing more than they generate in revenue, making them unprofitable.
The best way for companies to achieve sustainable growth is by having a finely tuned economic model that allows companies to minimize their costs and maximize their profits.
Creating that kind of model requires a thorough understanding of basic operating and financial metrics that measure your company’s profitability, efficiency, and growth rates, as well as how your company stacks up against its peers regarding these metrics.
With that in mind, OpenView surveyed more than 160 senior executives at SaaS companies, as well as their consultants, in order to create a report that is specifically focused on some of the growth and profitability metrics that are most relevant to SaaS companies at the expansion stage, including:
- Annual revenue growth
- Average revenue per employee
- Average sales and marketing spend
- The relationship between revenue growth and sales and marketing spending levels
- Sales and marketing spend per dollar of additional revenue
- Average sales and marketing spend to gain one dollar of MRR
- Annual customer growth rate and percentage of revenue loss
The bottom line is that context and relevancy of your SaaS metrics are critical for strategic decision-making. The more stage and size-appropriate data you are able to acquire, the easier it will be to decide which factors may influence or impede your ability to scale. While understanding the industry averages in this report is key, it is still up to you and your management team to determine the relevancy of that data to your business’s current and future goals.
For more insights and complete survey results, download your free copy.