175 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com

A MoveToSaas E-Book

75 Best Practice SaaS Benchmarks for your Business Case

2 375 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com 75 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com

1. Contents1. Preface SaaS Benchmarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. 75 Best Practice Benchmarks for your SaaS Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.1Whatarethebenefitsandlimitationsofbenchmarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.2HowDoIUseBenchmarkinginmyBusinessPlan? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.3WheretofindbenchmarksforyourSaaSandSoftwareBusiness . . . . . . . . . . . . . . . . . . 6

3.BenchmarkSourcesCovered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4.SaaSBenchmarksforyourBusinessPlan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

5.SaaSBenchmarking–SalesCostandSalesTarget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5.1BenchmarkstocaptureOn-TargetEarnings(OTE)ofsalesstaff . . . . . . . . . . . . . . . . . . 14

6.BenchmarkstocaptureSalesCommissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

7.BenchmarkstocaptureAnnualSalesTargets(Quota) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

8.SaaSBenchmarking–AnnualContractValue(ACV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

9.SaaSBenchmarking–LeadCostandPipelineConversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

9.1Benchmarkstogetleads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

9.2Benchmarkstoconvertleadsintocustomers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

10.SaaSBenchmarking–ChurnandGrossMargin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

10.1 Benchmarks to retain customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

10.2Benchmarkstodeliverprofitably . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

11.SaaSBenchmarking–KeyMetricsPaybackandLTV/CACRatio . . . . . . . . . . . . . . . . . . . . . . . . . 33

12.SaaSBenchmarking–GeneralCost,MobileProductandCloudServicePricing . . . . . . . . 34

12.1BenchmarksforGeneralCostStructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

12.2BenchmarksforMobileProductDevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

12.3BenchmarksforCloudServicesPricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

AppendixA-SaaSBenchmarking–TopBenchmarkPublicationsandSources . . . . . . . . . . . . . . 37

A.1Lean-Case–SaaSModelsandScenariosintheCloud,2015 . . . . . . . . . . . . . . . . . . . . . 37

A.2InsightPartners–PeriodicTablesofSaaSMetrics,2014 . . . . . . . . . . . . . . . . . . . . . . . . . 38

A.3TomaszTunguz–BenchmarkingPublicSaaSCompanies,2014 . . . . . . . . . . . . . . . . . . 39

A.4PacificCrest–SaaSSurvey,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

A.5HubSpotBlogs–YourDailyDoseofInbound,2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

A.6Implisit–B2BSalesConversionRates,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

A.7Totango–AnnualSaaSMetricSurveyReport,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

A.8TheBridgeGroup–SalesDevelopmentandInsideSalesReportsonMetrics&

Compensation,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

A.9InsightSquared–NewBenchmarksforInsideSalesTeams,2014 . . . . . . . . . . . . . . . . 47

A.10Xactly–SaaSIncentiveCompensationBenchmarkReport,2014 . . . . . . . . . . . . . . . . 48

A.11Salary.com–AverageSalaryRangesforSalesJobs,2015 . . . . . . . . . . . . . . . . . . . . . . . . 49

A.12ZendeskBechmark–BehavioralCuesofCustomerSatisfaction,2014 . . . . . . . . . . 50

A.13Openview–StateofB2BMobileGrowthMetrics,2015 . . . . . . . . . . . . . . . . . . . . . . . . . 51

A.14Kaseya–MSPGlobalPricingSurvey,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

4 575 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com 75 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com

1. Preface SaaS BenchmarksThis ebook is part of a series of posts on understanding SaaSMetrics, applying SaaS

Benchmarks,buildingarecurringrevenuebusinessmodel,scalingtherightsalesplanandwin

fundingforaSaaSbusinesswithaleancase.

IwouldliketothankDavidSkokandSteveBlankfortheirworkwhichhasinspiredmetre-

mendously.WhilepresentingmyownSaaSstartupaccellstoinvestorsandVCs,Icameacross

DavidSkok’sblogsonSaaS metricsandSaasModelsandSteveBlank’sUdacityOnlineCourse

onHowToBuildaStartupusingtheLeanStartupandBusinessModelCanvasapproach.After

wesoldaccellssuccessfullytoPingIdentity,Idevelopedastrongdesiretosharemyexperience

withotherentrepreneurs.Mygoalwassimple:toincreasetheirchancesforfinancingandsuc-

cess.

ThisiswhyIstartedworkingonLean-Case,asimulationtoolforrecurringrevenuemod-

els,twoyearsago.IwantyoutoavoidthepitfallsIhaveseen,byusingtherightformulas,ap-

plyingtherightassumptions,makingthebusinesscaselookappealing,andbuildingamodel

tosupportscenariosandcontinuousanalysisandtracking.Originally,benchmarkingwasan

integralconceptinLean-CasebutIlearnedthattherewasnosinglebenchmarkingdatasource

thatLean-Casecouldleverage,butthattherewasawealthofinformationregardingbench-

marksspreadacrosstheweb.Thisishowtheideaforaseparateservicedevelopedwhichwe

havecalledLean-Marks.

BasedonourLean-CaseandLean-Marksexperience,wemarketallourexperiencewith

businessmodeling,businesscasesimulationandbenchmarkingunderMoveToSaaS.

2. 75 Best Practice Benchmarks for your SaaS BusinessThisebookprovidesSaaSentrepreneurs,BusinessManagersandInvestorswithanover-

viewoftopresourcesforSaaSandSoftwarebenchmarks.

Acrossthoseresources,wehaveselected75bestpracticebenchmarkstomakereason-

ableassumptionsinnumeroussituations…whencreatingyourSaaSbusinesscase,whenfind-

ingtherightgrowthstrategy,whentryingtounderstandyourperformanceorreviewingan

investmentproposal.YoufindallthesebenchmarksplusmanymoreonlineatLean-Marks.com.

2.1 What are the benefits and limitations of benchmarksBenchmarkingisacommonpracticeandsensibleexercisetoestablishbaselines,define

bestpractices,identifyimprovementopportunities,andunderstandhowtocompete.Bench-

marking helps companies gain an independent perspective. They can understand howwell

theyperformagainstpeers,identifyandprioritizespecificareasofimprovement,validateas-

sumptionsaswellassetperformanceexpectations.

Benchmarkingworkswellwhentheprocessbeingbenchmarkedisastandardoneand

essentially is thesameforallunits (either internalorexternal)participating in theexercise.

Forexample,it’susefultocomparethecostofdevelopingthesamewidget,providingthesame

kindofonlinesupportorusingthesamekindofcloudservice.Butbenchmarkingisnotinform-

ativewhenitisusedtocomparefundamentallydifferentprocessesorproducts.Forexample,

DropboxwouldprobablynotbenefitfromstudyingSAP’ssellingprocess,astartupwouldnot

benefitfromcomparingitschurnratewiththechurnrateofpublicSaaScompaniessuchas

SalesforceorBox.BereasonableanddonotcompareApplesandOranges–simplisticbench-

markingusingaggregatestatisticsonlyhascertainvalidity.

At MoveToSaaS,wecombinebenchmarkingwiththestrategicprocessoffindingtheright

businessfocus.SaaScompaniesmustfocusontherightmetricsforeachstageoftheirproduct

growthlifecycle.

• Early stage startupsbuildingaminimumviableproductmustfocusonchurn,featureuse,andsurvivalfinancing.

• Later stage startupsrampingupmarketingandsalesmustfocusonkeymetricslikechurn,cost-of-customeracquisition,andgrowthfinancing.

• Growth companiesscalingtheirbusinessandincreasingtheirgeographicscopemustfocusonkeymetricssuchascustomeracquisitioncost(CAC),customerlifetimevalue

(CLTV),customersegmentation,andgeographicexpansion.

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2.2 How Do I Use Benchmarking in my Business Plan?IfIwanttoconvincepotential investorsthatmybusinessideaisviable,towhatextent

andhowshouldIuseabenchmarkingcomparisonofsuccessfulcompaniesandconsequently

shapemyplan?

Benchmarkingbasedonavailableinformationaboutsimilarcompaniesinothermarkets

canbeausefulwaytoaddgranularityandcredibilitytoyourbusinessplan.Dependingonhow

muchinformationontheseotherexamplesyouhave,applyingthebenchmarkcompanygrowth

patterns,orramp-upnumbers,ormarketpenetrationcanbeuseful.

Butbecarefulasyoudothis.Youshouldbesensitivetothefactorsyouareconsidering

becausetheycomefromadifferenttimeandadifferentmarket,andmaynotberelevantto

yourownbusiness.Berespectfulofthesedifferences,andifatallpossibleadjustyournum-

berstoreflectthem.Theseadjustmentswilladdtocredibilitytoyourplan.

We’ve seen plans and pitches in which entrepreneurs simply apply somebody else’s

growthrateorprofitabilitytotheirownprojections.Andpotentialinvestorswonderifthose

projectionsarerelevanttoyourbusiness.It’sanaturalreaction,soanticipateit.

So,yes,useresultsfromsimilarcompaniestohelpbuildyourearlyprojections.Butdoit

carefullyandwithadjustmentsforyourspecifics.Then,itwillgiveyourplancredibility.

2.3 Where to find benchmarks for your SaaS and Software BusinessTherearemanygreatsourcestofindandcheckbenchmarksonline.Theycovercountless

insightsonthegeneralbusinesseconomics,funding,salesandmarketing,customersuccessas

wellasproductandsoftwaredevelopment.

However,theyarenoteasytofind,theyonlyfocusonspecificfunctionsortopics, it is

difficulttoputthemintocontext,theycomeinPDFformatandtheycannotbesearchedand

compared.Onsuchabasis, itbecomesreallyhardtocheckthemoutandmakemeaningful

decisions.

ThisiswhywesetupLean-Marks.comtocoverthebestsourcesofpubliclyavailableSaaS

andSoftwarebenchmarksinoneplaceforthefollowingtargetgroups:

• Entrepreneurs–requirebenchmarkstounderstandtheuniteco-

nomicsofacustomer,buildtheirbusinesscase,evaluatetheirstart-

ups’performance

• OperationalExecutives–usebenchmarkstoassesstheirfunctional

performance,e.g.revenueandcustomergrowth,spendinglevels,..

• CFOs–needbenchmarkstoassesstheircompanies’performanceandgrowthplans

againstspecificpeercompanies

• Investors–havetobeabletoevaluatetheperformanceoftheirportfoliocompanies

Fig. 1: Lean-Marks

On Lean-Marks(seefigure1),youcankickoffsearchingforbenchmarkswithafulltext

search(e.g.enterthekeyword“quota”).

• Lean-Marks shows relevant results for your search (seefigure2).With the search

baronyourright,youcanrefineyoursearch(e.g.searchbybenchmarkpublicationor

searchingbyseveralkeywordcategories).

• Eachbenchmarkisreferenced,taggedandvisuallyrepresented(seefigure3).

• AllbenchmarksourcescoveredonLean-Marksenjoyhighsocialmediaactivityand

virality.Lean-Marksisyourstartingpointtodigdeeperintothem.

This ebook and the corresponding e-book provide a subset of benchmarkswhich are

availableonLean-Marks.

IfyoucomeacrossotherbenchmarksourceswhichLean-marksshouldcover,pleaselet

us know.

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Fig. 2: Lean-Marks Search Results and Search Bar

Fig. 3: Lean-Marks Benchmark Example

3. Benchmark Sources CoveredThisistheoverviewofBenchmarkSourceswhichLean-Markscurrentlycovers.Please

refertotheappendixforanin-depthdescriptionofeachsource.

SaaSModelsandSce-

narios in the Cloud,

2015

Aggregated Benchmarks for your SaaS Business

Model

PeriodicTablesofSaaS

Metrics,2014

“PeriodicTables”ofB2BDigitalMarketingMetrics,

SaaSSalesMetricsandSaaSFinancial&Operating

Metrics

Benchmarking Pub-

lic SaaS Companies,

2014

KeybenchmarksofPublicSaaScompanies;revenue,

customersuccess,sales,quotas,etc

SaaSSurvey,2014

Growth,Salesmodels,Targetcustomers,Go-to-mar-

ketapproach,CAC,Contract,Pricing,Services,Sales

commissions,Grossmargin,OPEX,Cost structure,

Churnandretention,etc

YourDailyDoseofIn-

bound,2015

Withthepowerful,easytouse,integratedsetofap-

plications, businesses can attract, engage, and de-

light customers by delivering relevant, helpful, and

personalizedinboundexperiences

B2BSalesConversion

Rates,2014

B2BSalesConversionRates–LeadtoOpportunity,

LeadtoDeal

Annual SaaS Metric

SurveyReport,2014

SaaS and customer metrics, Acquisition, renewals

and upsells, Retention and Acquisition costs, Free

trialsvsFreemium,Churn,etc

Sales Development

and Inside Sales Re-

ports on Metrics &

Compensation,2014

TeamStructure(numberofreps,territories,experi-

ence level, average tenure, ramp up), SalesQuotas

(basis, Quota based on ACV, Average number of

deals,Quotaachievement),Salesefficiency(average

numberofdailydials,dialattemptsandconnects)

InsightSquared–New

BenchmarksforInside

SalesTeams,2014

Conversion rates, Average deal sizes, Number of

bookingsperrep,Salescycles,Saleseffort,Winrates,

Salescycles,Saleseffortetc.

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SaaS Incentive Com-

pensation Benchmark

Report,2014

Incentiveplandesign,Quotasize,Quotaattainment,

Salesattritionetc

AverageSalaryRanges

forSalesJobs,2015

AverageSalaryRangesforSalesJobsinSoftwareIn-

dustries

Behavioral Cues of

Customer Satisfac-

tion,2014

Customer Satisfaction by Countries, Industry, Po-

litenessofcustomers,Emailprovideretc.

State of B2B Mobile

GrowthMetrics,2015

MetricsforMobileappswhicharethenextbigwave

in B2B SaaS

MSP Global Pricing

Survey,2014

IT services that MSPs deliver on the ex-

isting and emerging types of services

they offer, incl. current service pricing and future

pricingexpectations,

4. SaaS Benchmarks for your Business PlanIfyoustartbuildingyourbusinesscase,youhavetomakeafewchoices.Areyoustarting

fromscratchandbuildingyourownExcelmodel,orcanyoureuseanoldermodelwhichyou

usedbefore,orcouldyouevenuseamodelsomeoneelsehasbuilt?Maybeyouwanttotask

expertsliketheguysatMoveToSaaStohelpyoubuildyourmodelwithsimulationandreport-

ingcapabilities.However,ifyouaresickofExcel,youcouldalsouseaservicelikeLEAN-CASE

tocreateandshareyourcase.

Inallcases,foranyoftheseoptions,youhavetodealwithbusinessassumptionswhich

typicallyfallintoafewcategories.Benchmarksinthosecategorieshelpyoutomakeyourplan

better.ForThisebook,weareapplyingthesamecategoriesasusedbytheLean-Caseservice.

Inthefollowingchapters,wedescribe

• SaaSBenchmarksforSalesCostandSalesTargetsto capture

o On-TargetEarnings(OTE)ofsalesstaff

o Salescommissions

o AnnualSalesTargets(Quota)

• SaaSBenchmarkstocalculatetheAverageContractValue

• SaaSBenchmarksonLeadCost,andPipelineConversion to capture the customer ac-

quisitionprocesswithcostofleadsandpipelineconversionparameters

• SaaSBenchmarksonChurnandGrossMargintokeep-and-growcustomersandcap-

turethecustomerretentionprocesswithchurnandexpansionratesandtheprofit-

abilityofservicedeliverywithgrossmargins

• SaaSBenchmarksonKeyMetricssuchasCustomerAcquisitionCost(CAC),Custom-

erLifetimeValue(CLTV),PaybackandtheCLTV/CACRatio

• SaaSBenchmarksonOpex,ProductdevelopmentandCloudServices

Inaddition,pleasechecktheappendixformoredetailsonallTopSaaSBenchmarkPubli-

cationsandSources whichwehaveleveragedinthisebook.

 Foreachchapterabove,wehaveselectedagroupdofrelevantbenchmarks.Eachbench-

markisdescribedinthesamestructureprovidingyouashortdescriptionwithdeeplinksas

showninthefigurebelow.

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Fig. 4: Example – Benchmark descriptions

LeanMarksprovidesyouthebenchmarksource,thebenchmarkdescription,themajor

messagebehindthebenchmarksandtagswhereyoufindsimilar benchmarks.Atanytime,you

canclickonthelinkstofindadditionalinformationprovidedonLean-Marks.

Fig. 5: Lean-Marks Benchmark Example

IfyouwanttolookupdefinitionsofSaaSMetricswhilereadingthroughthebenchmarks,

pleaserefertoourpost LeanSaaSMetrics–TheDefinitiveGuidetocreatebusinessimpact.

FeelfreetolaunchtheLean-CaseSimulationDashboard to create your SaaS case.

Enjoy the read! And please share the link to This ebook and the ebook with the world.

14 1575 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com 75 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com

5. SaaS Benchmarking – Sales Cost and Sales TargetThis ebook provides SaaS entrepreneurs, Business Managers and Inves-

tors with the top 75 best practice benchmarks for your SaaS and Software busi-

ness. Within this chapter we are covering Benchmarks to derive your Selling Cost.

SalesBenchmarksarerelevantto

• captureOn-TargetEarnings(OTE)ofsalesstaff

• captureSalescommissionsand

• captureAnnualSalesTargets(Quota)

DependingonyourSalesModelandyourlocationyourSalesCostcanvarysignificantly,

e.g.thecostforaDirectFieldSalesReparesignificantlyhigherthanforanInsideSalesRep,

thecostofaSalesManagerinSanFranciscoissignificantlyhigherthanintheMidWest.Itis

relevanttocapturetheyearlytotal-cost-to-companyinyoursalesplanwhichdependsonyour

SalesModel.

Ifyouaresellingviaadirectsalesforce,youmustcapturethefullyloadedcostoftheSales-

force.IftheSalesUnitrepresentsapartnerchannel,youmustcapturethecommissionsyou

paytothepartner.IftheSalesunitrepresentsaninbound/outboundsalesteam,youshould

capturethetotalcostofthatteam.

Andlastbutnotleast,thequotaofaSalesUnitdrivesitsperformancewhichagainvery

muchdependsonyoursalesmodelaswellasyourcostofselling.

5.1 Benchmarks to capture On-Target Earnings (OTE) of sales staff

On-Target Earnings by Types of Sales Reps

FieldSalesRepsearnmost($220k),3.4timesmorethanSalesEngi-

neer($64k)

FINANCIAL METRICS– SALES COMP & QUOTA– ON TARGET

EARNINGS– ALL SALES TEAM ATTRIBUTES– TEAM TYPESALES

DEVREPS– INSIDESALES– FIELD/OUTSIDESALES

 

On-Target Earning per Inside Sales Rep

OTEforISRsarevaryinggreatlybetween60-130$k

FINANCIAL METRICS– SALES COMP & QUOTA– ON TARGET

EARNINGS– ALL SALES TEAMATTRIBUTES– TEAM TYPEINSIDE

SALES

 

On-Target Earnings by Types of Sales Reps

FieldSalesReps(SRs)make70%moreinOTEthanBusinessDevelop-

mentRepsand215%morethanInsideSRs

FINANCIAL METRICS– SALES COMP & QUOTA– ON TARGET

EARNINGS– ALLSALESTEAMATTRIBUTES– TEAMTYPE– SALES

DEVREPS– INSIDESALES– FIELD/OUTSIDESALES

 

Ratio Of Sales to Headcount in Public Companies by Years since Founding

Theratioincreasesfrom1.5inYear1to2.1inYear7

ALLSALESTEAMATTRIBUTES– TEAMPROFILE– STRUCTURE

 

Years of Experience Required per Inside Sales Rep

Averageexperiencepriortohireis2.7years

ALLSALESTEAMATTRIBUTES– TEAMTYPE– INSIDESALES– TEAM

PROFILE– EXPERIENCE

 

Average Tenure per Inside Sales Rep

AverageTenureperInsideSalesReppaverages2.5years

ALL SALES TEAM ATTRIBUTES – TEAM TYPE– INSIDE SALES–

TEAMPROFILE– TENURE

 

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Annual Attrition Rates / Turnover for Inside Sales Reps

Mostcompanieshaveannualsalesattritionof15-25%

 

Ratio between Executive and Inside Sales Reps within Inside Sales Team

AverageExecutivetoRepRatio:1:7

ALLSALESTEAMATTRIBUTES– TEAMTYPE– INSIDESALES– TEAM

PROFILE– STRUCTURE– MANAGEMENT

 

Average On-Target Earnings per Sales Development Rep

OTEaverage$72.1kwitha64%basecomponent

FINANCIAL METRICS– SALES COMP & QUOTA– ON TARGET

EARNINGS– ALLSALESTEAMATTRIBUTES– TEAMTYPE– SALES

DEVREPS

 

Share of Incentive Components in Variable Compensation of Sales Development Rep

Aquarterofcompaniestielargestshareofcompensationtowonop-

portunities

FINANCIALMETRICS– SALES COMP & QUOTA– QUOTA BASE–

ALLSALESTEAMATTRIBUTES– TEAMTYPE– SALESDEVREPS

 

Total Annual Variable Pay for Sales Representatives

SalesRepresentativesinsmallercompaniesmakeanaveragevariable

payof$100k,theymakesignificantlylessinlargercompanies

FINANCIAL METRICS – SALES COMP & QUOTA– ON TARGET

EARNINGS– ALLSALESTEAMATTRIBUTES– TEAMTYPE– FIELD/

OUTSIDESALES

 

Inside Sales Salaries (Median – U.S. National Average)

InsideSalesSalariesstarta$45kperyear

 

MedianSalariesofSalesRepresentatives(IncentiveOnly)

MedianOTEof sales reps (incentiveonly) startsat$54kper

year

FINANCIALMETRICS– SALESCOMP&QUOTA– ONTAR-

GET EARNINGS– ALL SALES TEAM ATTRIBUTES– TEAM

TYPE– SALESDEVREPS– INSIDE SALES– FIELD/OUTSIDE

SALES

 

MedianSalariesofAccountManagementManager/Director

Mediansalaryofaccountmanagementmanagerstartsat$113

k per year

FINANCIALMETRICS– SALESCOMP&QUOTA– ONTAR-

GETEARNING

 

MedianSalariesofAccountExecutive(USNationalAverage)

Mediansalaryofaccountexecutivemanagerstartsat$77kper

year

FINANCIALMETRICS– SALESCOMP&QUOTA– ONTAR-

GETEARNING

 

MedianSalariesofCustomerServiceRepresentative

Mediansalaryofcustomerservicerepstartsat$33kperyear

FINANCIALMETRICS– SALESCOMP&QUOTA– ONTAR-

GETEARNINGS

 

18 1975 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com 75 Best Practice SaaS Benchmarks for your Business Case | © MoveToSaaS.com

MedianSalariesofSalesEngineer

Mediansalaryofsalesengineerstartsat$64kperyear

FINANCIALMETRICS– SALESCOMP&QUOTA– ONTAR-

GET EARNINGS– ALL SALES TEAM ATTRIBUTES– TEAM

TYPE– SALESDEVREPS

 

6. Benchmarks to capture Sales Commissions

AverageCommissionsbySalesActivity

Average Sales Commission for New Business are at 8-9% of

ARRQuota

FINANCIAL METRICS– SALES COMP & QUOTA– SALES

COMMISSIONS– ALL PROCESSES– CUSTOMER LIFETIME

VALUE– RENEWAL– EXPANSION (UP-/CROSS SELL)– ALL

SALESTEAMATTRIBUTESTEAMTYPE– SALESDEVREPS–

INSIDESALES– FIELD/OUTSIDESALES

 

AverageSalesCommissionsbySalesActivity

SalesCommissionaverage8-9%forNewBusiness,6%forUp-

sellBussinessand2%forRenewalBusiness

FINANCIAL METRICS– SALES COMP & QUOTA– SALES

COMMISSIONS– ALL SALES TEAM ATTRIBUTES– TEAM

TYPE– SALESDEVREPS– INSIDE SALES– FIELD/OUTSIDE

SALES

 

SalesCommissionsbySalesModel

MedianSalesCommissionforInsideSalesat9%andforField

Salesat10%

FINANCIAL METRICS– SALES COMP & QUOTA– SALES

COMMISSIONS– COMPANY PROFILE– SALES MODEL–

FIELD SALES– INSIDE SALES– ONLINE SALES– CHANNEL

SALES

 

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7. Benchmarks to capture Annual Sales Targets (Quota)

SalesQuotaperYearbySalesFunctions

QuotaforOutsideSalesRepsisupto3xhigherthanforInside

SalesReps

FINANCIALMETRICS– SALES COMP &QUOTA– QUOTA–

ALL SALES TEAM ATTRIBUTES– TEAM TYPE– SALES DEV

REPS– INSIDESALES– FIELD/OUTSIDESALES

 

ARRQuotaperQuarterandperYearbySalesFunctions

Quota forFSR($800k-$1300k/year) isalmost2timeshigher

thanthatofISR($630k-$720k/year)

FINANCIALMETRICS– SALES COMP &QUOTA– QUOTA–

ALL SALES TEAM ATTRIBUTES– TEAM TYPE– SALES DEV

REPS– INSIDESALES– FIELD/OUTSIDESALES

 

RatioofQuotaandSalarybySalesFunctions

ISRandFSRhavesomewhatsimilarratios

FINANCIALMETRICS– SALESCOMP&QUOTA– ONTAR-

GETEARNINGS– QUOTA– ALLSALESTEAMATTRIBUTES–

TEAMTYPE– SALESDEVREPS– INSIDESALES– FIELD/OUT-

SIDESALES

 

SalesQuotaforInsideandOutsideSalesReps

Quota forOutside Sales Reps ismuch higher than for Inside

SalesReps

FINANCIAL METRICS– SALES COMP & QUOTA– QUO-

TA– ALL SALES TEAMATTRIBUTES– TEAM TYPE– INSIDE

SALES– FIELD/OUTSIDESALES

 

QuotaBaseforInsideSalesRepsCompensation

Three quarter of companies assign their inside sales reps individual

oversharedquotas

FINANCIALMETRICS– SALES COMP & QUOTA– QUOTA BASE–

ALLSALESTEAMATTRIBUTES– TEAMTYPE– INSIDESALES

 

RelativeWinRateofInsideSalesTeambyDealSizeQuartile

Largedeals(quartile4)are20%lesslikelytobewonthanaveragedeals

FINANCIAL METRICS– SALES COMP & QUOTA– DEALS WON–

COMPANYPROFILE– CONTRACT&PRICING– CONTRACTSIZE–

ALLSALESTEAMATTRIBUTES– TEAMTYPE– INSIDESALES

 

QuotaAttainmentofFirstLineManagerandSalesTeambyCompany

Size

WhileSalesManagersachieve81%ofquota,SalesTeamsachievean

averageof75%

FINANCIALMETRICS– SALESCOMP&QUOTA– QUOTAACHIEVE-

MENT– ALLSALESTEAMATTRIBUTES– TEAMTYPE– FIELD/OUT-

SIDESALES

 

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8. SaaS Benchmarking – Annual Contract Value (ACV)ThisebookprovidesSaaSentrepreneurs,BusinessManagersandInvestorswiththetop

75bestpracticebenchmarksforyourSaaSandSoftwarebusiness.Withinthischapterweare

coveringBenchmarkstocalculatetheAnnualContractValue.

TheAnnualContractValue(ACV)istheaveragevalueofaservicecontractpaidfor12

months.ItisagoodindicationtounderstandAverageACVindifferentindustriesandfordif-

ferentsolutions.

TheACVcandependonvariousfactors

•Focusonnewbusinessorupsellbusiness

•CompanyGrowth(fastergrowingcompaniestendtohaveahighershareofupsellbusi-

ness)

•SalesModel(theACVofanInsideSalesModelislowerthantheACVofaFieldSales

Model)

•PricingofServicePlans

•ContractLength(ifcompaniessellonmonthlybasis,theymeasureMonthlyRecurring

Revenues(MRR)insteadACV–typicallythiscanbecomparedifMRRaremultipliedby12)

AverageRevenuesperCustomerforSelectedPublicSaaSCompanies

Vevaaearns$780krevenuepercustomer,muchmorethanothercom-

panies

FINANCIALMETRICS– CONTRACTVALUE– REVENUES– ARR

 

MedianAnnualContractSize(ACV)perCustomer

Medianannualcontractsize (subscriptioncomponentonly)atabout

$21Kperyear

FINANCIALMETRICS– CONTRACTVALUE– ACV

 

ShareofUpsellBusinessbyGrowthRate

Fastestgrowingcompanies(>75%YoYrevenuegrowth)havehigher

shareofUpsellBusiness

EXPANSION (UPGRADE)– FINANCIAL METRICS– GROWTH–

GROWTHRATE– ALLPROCESSES– CUSTOMERLIFETIMEVALUE–

EXPANSION(UP-/CROSSSELL)

 

RelativeDealSizeandBookingsofInsideSalesTeamsbySlowvs.Fast

GrowingCompanies

Fastgrowingcompanieswinlargerdeals(2.8xonaverage)thanslow-

growing companies

FINANCIAL METRICS– SALES COMP & QUOTA– BOOKINGS–

GROWTH– GROWTH RATE– COMPANY PROFILE– CONTRACT

& PRICING– CONTRACT SIZE– ALL SALES TEAM ATTRIBUTES–

TEAMTYPE– INSIDESALES

 

RelativeDealSizeofInsideSalesTeamsbyWonvs.LostDeals

Lostdealsare1.9timeslargerthanwondealsonaverage

FINANCIALMETRICS – SALESCOMP&QUOTA – DEALSWON –

ALLSALESTEAMATTRIBUTES – TEAMTYPE – INSIDESALES

 

MRRperDealandNumberofClosedDealsperQuarterbySalesFunc-

tions

FSRcloseslessdealsbutlargerdealsthanISR

FINANCIAL METRICS– CONTRACT VALUE– MRR– ALL SALES

TEAM ATTRIBUTES– TEAM TYPE– SALES DEV REPS– INSIDE

SALES– FIELD/OUTSIDESALES

 

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MRRBookingsbyCompanyGrowthRateandbySource

Hyper Growth companies get mostMRR bookings from new logos

whileScaleModelpeersfromrenewals

FINANCIAL METRICS– SALES COMP & QUOTA– BOOKINGS–

CONTRACTVALUE– MRR– GROWTH– GROWTHRATE

 

CompaniesbyPricingFactorsandbyContractLength

COMPANY PROFILE– CONTRACT & PRICING– CONTRACT

LENGTH– PRICINGMETRIC

 

ProfessionalServicesMetrics(Revenue,BillableHours,HourlyRate,

TargetUtilization)

54%SaaScompaniesofferProfessionalServiceonboarding,earning

25%ACVfromPSrevenue

COMPANYPROFILE– SERVICETYPE– PROFESSIONALSERVICES

 

9. SaaS Benchmarking – Lead Cost and Pipeline Conversion

This ebook provides SaaS entrepreneurs, Business Managers and Inves-

tors with the top 75 best practice benchmarks for your SaaS and Software busi-

ness. Within this chapter we are covering Benchmarks to get customers.

Benchmarksonthecustomerlifecyclearerelevantfor2phases–toget-a-customeraswellas

tokeep-and-growthem.

TheGet-a-Customerphaseisdividedintotwostagestoconvertaleadintoapayingcus-

tomer:

•Get-a-Lead–definingthecosttoacquireaqualifiedleadacrossleadchannels

•Convert-a-Lead–defining thepipeline stagesandconversionparameters toconvert

leadsfromonepipelinestagetothenext–andfinallyintopayingcustomers

 

9.1 Benchmarks to get leadsTheGet-a-Leadphasedefinesthecosttoacquirealeadacrossleadchannels.

CostofLeadscandependonanumberoffactors:

• LeadChannel

• IndustryTargetsegment

• ShareofPaidvsUnpaidLeadsfortherespectiveLeadChannel

NumberofMonthlyVisitorstoCompanyWebsitebyIndustry

Numberofmonthlyvisitorsofsoftwareindustryissimilartootherin-

dustries

COMPANYPROFILE – SERVICEOFFERING – SAAS – SW – HW – MIX

– ALLPROCESSES – AWARENESS – SALESDEVELOPMENT – CUS-

TOMERLIFETIMEVALUE – ACQUISITION

 

NumberofMonthlyLeadsbyIndustry

Numberofmonthlyleadsinsoftwareindustryissimilartootherindus-

tries

ALL PROCESSES – AWARENESS – SALES DEVELOPMENT – CUS-

TOMERLIFETIMEVALUE – ACQUISITION

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NumberofMonthlyOpportunitiesbyIndustry

Numberofmonthlyopportunitiesinsoftwareindustryissimilartooth-

erindustries

COMPANYPROFILE – SERVICEOFFERING – SAAS – SW – HW – MIX

– ALLPROCESSES – AWARENESS – SALESDEVELOPMENT – CUS-

TOMERLIFETIMEVALUE – ACQUISITION

 

Costs per Lead by Industry

Softwarecompaniesarepayinghighercostsperleadthanotherindus-

tries

CAC – COMPANYPROFILE – SERVICEOFFERING – SAAS – SW – HW

– MIX – ALLPROCESSES – CUSTOMERLIFETIMEVALUE – ACQUISI-

TION

 

9.2 Benchmarks to convert leads into customersTheConvert-a-Leadphaseisdefinedbypipelinestagesandtheconversionparametersto

convertleadsfromonepipelinestagetothenext–andfinallyintopayingcustomers.Conver-

sionParameterscanalsodependonanumberoffactors,e.g.

• SalesModel(e.g.InsideSalesvsFieldsales)

• MarketingChannels(e.g.Website,SocialMedia,Webinars,..)

• AvailabilityofFreemiumModelsandFreeTrials

• CompanyGrowth

 

LeadtoCloseConversionRatebyFremiumSalesandInsideSales

ConversionRate fromFremiummodels isabout tentimes lowerthan

fromInsideSales

ALLPROCESSES– EVALUATION– FREEMIUMOFFER– WINRATE–

ALLSALESTEAMATTRIBUTES– TEAMTYPE– INSIDESALES

 

ShareofNewBusinessGeneratedbyFreeTrialsandFreemiums

More than half of the companies derive >25% of their new business

throughtrialandfreemiumconversions

ALLPROCESSES– EVALUATION– FREEMIUMOFFER– TRIALOFFER

 

B2BSalesConversionLead-to-Deal

Lead-to-Deal Conversion rates average 0.78% (Lead to Opportunity

13%–LeadtoDeal6%

ALLPROCESSES– EVALUATION– WINRATE– PURCHASE

 

B2BSalesConversionRatesbyChannel

Lead-to-DealConversionratesaverage0,78%–Referrals,Websiteand

SocialMedaaremosteffectivechannels

ALLPROCESSES– EVALUATION– WINRATE

 

Lead-to-OpportunityandOpportunity-to-DealConversionRate

18%webinarattendeesconverttoopportunitiesbutonly2.5%closeto

deals

ALLPROCESSESEVALUATIONWINRATE

 

Closed-WonoverClosed-LostOpportunitiesRatio

Events,leadlistsandpartnersmorelikelytobeclosed-lostthanothers

ALLPROCESSES– EVALUATION– WINRATE

 

CTR,LikeRate,ConversionRate,CPM,CPCinFacebookadvertising

Facebookrawleadconversionratesisatalow0.7%

ALLPROCESSES– AWARENESS– SOCIALMEDIA

 

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Engagement Rate, Follow Rate and Raw Lead Conversion Rate from

Twitter

Twitterrawleadconversionrateisat2.2%

ALLPROCESSES– AWARENESS– SOCIALMEDIA

 

CostperEngagement/FollowerbyCountryfromTwitterAdvertising

CostperfollowerintheUSAisalmost3timeshigherthanintheUK

ALLPROCESSES– AWARENESS– SOCIALMEDIA

 

CTRandRawLeadConversionRatefromLinkedIn

LinkedInRawLeadConversionRateisatalow0.8%

ALLPROCESSES– AWARENESS– SOCIALMEDIA

 

ConversionRatebyPipelineStages

Conversionrateincreasesdownthepipeline

ALL PROCESSES– EVALUATION– FREEMIUM OFFER– TRIAL OF-

FER– WINRATE

 

Lead-to-DealConversionofInsideSalesTeaminslow-growingcompa-

nies(<100%p.a.)

InsideSalesRepsinslow-growingcompaniesconvert3.5%ofLeadsinto

Deals

FINANCIAL METRICS– SALES COMP & QUOTA– DEALS WON–

GROWTH– GROWTHRATE– EVALUATION– WINRATE– ALLSALES

TEAMATTRIBUTES– TEAMTYPE– INSIDESALES– TEAMPROFILE–

STRUCTURE

 

Lead-to-Deal Conversion of Inside Sales Team in fast-growing

companies(>100%p.a.)

Inside Sales Reps in fast-growing companies convert 1.1% of

LeadsintoDeals

FINANCIAL METRICS– SALES COMP & QUOTA– DEALS

WON– GROWTH– GROWTHRATE– ALLPROCESSES– EVAL-

UATION– WINRATE– ALLSALESTEAMATTRIBUTES– TEAM

TYPE– INSIDESALES

 

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10. SaaS Benchmarking – Churn and Gross MarginThis ebook provides SaaS entrepreneurs, Business Managers and Inves-

tors with the top 75 best practice benchmarks for your SaaS and Software busi-

ness. Within this chapter we are covering Benchmarks to keep and grow customers.

TheKeep-and-Growphaseissplitintotwostagestomaximizeretentionanddealprofitability

with paying customers

• Retaincustomers–definingcustomerchurnimportanttocalculatethecustomer

lifetimeaswellasrevenueexpansionofpayingcustomers

• Deliverprofitaby–definingtheprofitabilityofapayingcustomeralsobeingrel-

evanttocalculatethecustomerlifetimevalue

 

10.1 Benchmarks to retain customersTheMonthlyChurnRate is thepercentageofMonthlyRecurringRevenueswhichare

“churning,”thatis,beinglostonamonthlybasis.Ingeneral,thereisanimportantdistinction

between“RevenueChurn”and“CustomerChurn”.WhereasRevenueChurncanresultfrom

customersdowngradingtheirsubscription,CustomerChurnresultsfromCustomerswhodis-

continue their subscriptions in a given month.

Ontheotherhand,youhavetoconsidertheMonthlyExpansionRatewhichistheper-

centageof increase inmonthlyrecurringrevenuereceivedfromexistingcustomerswhoin-

creasetheirpurchasesofservices.Thiscanbeachievedbysellingmoreunitswithinthecus-

tomer’splanorbytheupgradeofacustomerintoahigherservicetier.Ideally,expansionrates

arehigherthanchurnrates–deliveringanegativenetchurn.

ChurnImpactonRevenueGrowth

ReducingMonthlyChurnfrom4%to0%doublesMRRwithin2

years

FINANCIAL METRICS– REVENUE CHURN– CUSTOMER

CHURN– GROWTH– REVGROWTH

 

SalesandMarketingSpendRequiredtoDoubleRevenuebyDif-

ferentChurnRates

Whenchurnratesrise,morecapitalisburnttomaintainthesame

revenue

FINANCIALMETRICS– CAC– CHURN– REVENUE CHURN–

OPEX– S&M– GROWTH– REVGROWTH

 

AnnualNetDollarRetentionfromExistingCustomers

103%medianannualnetdollarretentionrates includingchurn

andupsell’sbenefits.

FINANCIAL METRICS– CHURN– REVENUE CHURN– ALL

PROCESSES– CUSTOMERLIFETIMEVALUE– RENEWAL

 

PreferredMethodtoMeasureChurn

Majority of companiesmeasures churn by the number of cus-

tomerlost

FINANCIAL METRICS– CHURN– REVENUE CHURN– CUS-

TOMERCHURN

 

AnnualizedRevenueChurn

35%ofcompaniesreporthighchurn(>10%),while31%haveme-

diumchurn(5-10%)

FINANCIALMETRICS– CHURN– REVENUECHURN

 

MonthlyChurnbyGrowthRateofCompanies

Fastest growing companies (>75% YoY revenue growth) have

thelowestchurn

FINANCIAL METRICS– CHURN– REVENUE CHURN– CUS-

TOMERCHURN– GROWTH– GROWTHRATE

 

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10.2 Benchmarks to deliver profitablyInordertomeasureprofitability,Gross-Marginisakeymetric.GrossMarginsprimarily

dependontheTypeofRevenue(e.g.RecurringRevenuesvsProfessionalServiceRevenues).

TheGrossMarginonRecurringRevenuesisthepercentageofrecurringrevenuesretained

afterpayingthedirectCostofproducingtheserviceswhichweresold.Thisincludesthecost

ofcustomeron-boarding,hostingandservice.

TheGrossMarginProfessionalServicesisthepercentageofone-timeprofessionalser-

vicerevenuesretainedafterpayingthedirectCostrelatedtothatservice.Thisincludesthe

costofonetimeservicessuchasservicesetup,serviceintegrationortraining.

Obviously,GrossMarginsalsodependonthescaleofthecompany.

AverageGrossMarginsbyRevenueTypes

GrossMarginsfromSubscriptionsareaveraging80%–whereasGross

MarginsforProfessionalServicesarearound30%

FINANCIALMETRICS– CONTRACTVALUE– REVENUES– PROFIT-

ABILITY– GROSSMARGIN– COMPANYPROFILE– SERVICETYPE–

PROFESSIONALSERVICES– SUBSCRIPTIONSERVICES

 

MedianGrossMarginsbyRevenueTypes

GrossMarginsforSaaSrevenueisthelargest(79%)

FINANCIAL METRICS– PROFITABILITY– GROSS MARGIN– COM-

PANYPROFILE– SERVICETYPE– PROFESSIONALSERVICESS-UB-

SCRIPTIONSERVICES

 

GrossMarginTrendsoverTimeforPublicSaaSCompanies

GrossMarginofSaaScompaniesincreaseto75%overtime

FINANCIALMETRICS– PROFITABILITY– GROSSMARGIN

 

11. SaaS Benchmarking – Key Metrics Payback and LTV/CAC Ratio

ThisebookprovidesSaaSentrepreneurs,BusinessManagersandInvestorswiththetop

75bestpracticebenchmarksforyourSaaSandSoftwareBusiness.Withinthischapterweare

coveringBenchmarkstounderstandtheKeyMetricsCustomerAcquisitionCost(CAC),Cus-

tomerLifetimeValue(CLTV),PaybackandtheCLTV/CACRatio.

TheBenchmarks listedbelowparticularly help you to understand the short-term and

long-termviabilityofyourcase:

• Theshort-termindicatorMonthstoRecoverCACdefineshowfastyourecover

theCAC(ideallyfasterthan12months).

• The long-termindicatorLTV/CACshowshowmanytimestheLTVexceedsthe

CAC(ideallyaratiogreaterthanthree)

Foradetailedintroduction,pleaserefertoourInfographic:LeanSaaSMetrics.

CustomerAcquisitionCost (CAC) per dollar of newACVbyPrimary

SalesModel

FieldSalesmostexpensiveSalesModel–50%ofcompaniespay>$1per

dollarofnewACV

FINANCIALMETRICS– CAC

 

RetentionCostvsAcquisitionCostTracking

Significantlymorecompaniesmeasuretheircustomeracquisitioncosts,

comparedtotheircustomerretentioncosts

FINANCIALMETRICS– CAC

 

PaybackofCustomerAcquisitionCost (CAC)basedonRevenuesand

GrossMargin

CAC takes 1-2 years to payback

FINANCIALMETRICS– CAC

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12. SaaS Benchmarking – General Cost, Mobile Product and Cloud Service Pricing

ThisebookprovidesSaaSentrepreneurs,BusinessManagersandInvestorswiththetop

75bestpracticebenchmarksforyourSaaSandSoftwarebusiness.Withinthischapterweare

coveringafewoperationalBenchmarks.

Therearemanymoreoperationalbenchmarkswhichyoucanlookatandexploredirectly

onLean-Marks.Wepickedthreecategoriesforthisebook

• Benchmarksongeneralcoststructures

• BenchmarksforMobileProductDevelopmentand

• BenchmarksforCloudServicesPricing

12.1 Benchmarks for General Cost Structure

ExpensesandProfitabilityMetricsbyCompanyGrowthRate

Hyper Growth Companies spend more (1.5-2 times) on S&M, R&D,

G&Athanaverage(ScaleModel)

FINANCIALMETRICS– OPEX– S&M– R&D– G&A– PROFITABILITY–

GROWTH– GROWTHRATE

 

12.2 Benchmarks for Mobile Product Development

MobileProductDevelopmentExpenses asProportionofRevenueby

RevenueRange

Mostcompanieswithrevenue>$2Mspendupto20%revenueonmo-

bileproductdevelopment

OPEX– R&D

MobileDevelopmentTimebyStrategy

80%companieswhosemobilestrategyissecondarypublishappwithin

6 months

 

RevenueGrowthtoMobileMonthlyActiveUsersGrowth

MAUstartsslowbutpicksupatexpansionstage(85%atrevenue$2M-

10M)

FINANCIALMETRICS– GROWTH– GROWTHRATE– REVGROWTH–

COMPANYPROFILE– COMPANYSIZE

 

MedianGAAPRevenueGrowthRatebyMobileStrategy

CompaniesfocusingonmobilegrowsRev1.8timesmorethancompa-

nies focusing on web

FINANCIALMETRICS– GROWTH– GROWTHRATE– REVGROWTH

 

MobileMonetizationbyMobileProductStrategy

70%companiesfocusingonwebdonotmonetizetheirmobilesupple-

mentary strategy

 

12.3 Benchmarks for Cloud Services Pricing

CloudServicesPricingforCloudExchangeemailservicespermailbox

per month

Cloud Services Pricing for Cloud Exchange email services between

5-10$permailboxpermonth

OPEX– R&D– PROVIDERS– HOSTINGMETHODS

 

CloudServicesPricingforCloudStorageServicesperGBpermonth

PricingforCloudStorageServicesaround0.25$perGBpermonth

OPEX– HOSTING– PROVIDERS– HOSTINGMETHODS

 

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CloudServicesPricingforCloudBackupServicesperGBpermonth

PricingforCloudBackupServicesaround0.50$perGBpermonth

OPEX– HOSTING– PROVIDERS– HOSTINGMETHODS

 

CloudServicesPricingforCloudSharePointServicesperuserpermonth

PricingforCloudSharePointServiceslessthan5$perGBpermonth

OPEX– HOSTING– PROVIDERS– HOSTINGMETHODS

 

Cloud Services Pricing for Private Cloud Services per environment

(4vCPUsand4GB/100GBwith2VMs)permonth

PricingforstandardPrivateCloudServicesaround300$permonth

OPEX– HOSTING– PROVIDERS– HOSTINGMETHODS

 

Cloud Services Pricing for CloudMonitoring Services for 25 devices

and2500metricspermonth

PricingforCloudMonitoringServicesaround500$permonth

OPEX– HOSTING– PROVIDERS– HOSTINGMETHODS

13. Appendix A - SaaS Benchmarking – Top Benchmark Publications and Sources

ThisebookprovidesSaaSentrepreneurs,BusinessManagersandInvestorswiththetop

75bestpracticebenchmarksforyourSaaSandSoftwarebusiness.Withinthischapterweare

coveringtheBenchmarksSourcesusedbyLean-Marks.

A.1 Lean-Case – SaaS Models and Scenarios in the Cloud, 2015

Source LinkLean-Case – SaaS Models and Scenarios in the Cloud, 2015

Publisher Lean-Case

Published 2015

Basecompares benchmarks across various benchmark pro-

viders

Description

WithLean-Case,youcanleverageaSaaSBusinessCasemodelingservicetoplotatrans-

parentGo-to-SaaSbusinesscasetakingyourassumptionsbasedonrelevantbenchmarksinto

account.YoucanuseaprovenSaaSbusinessmodel, insteadofworryingaboutbuildingone

yourself.Lean-Caseleveragesauniteconomicsapproachtoevaluatetheviabilityofthego-

to-marketstrategyandthedynamicsofhiringnewsalesunits.Lean-Caseallowsyoutounder-

stand,plan,simulateandmanagethecash-flowgap,lifetimevaluesvsCAC,revenuerecogni-

tion,cashandexpenseprojectionsandprofitmarginseffectively.Itenablesyoutopresentand

shareanupdatedP&LforthenewSaaSproductlinewithyourpeers,investorsorboardina

winning way.

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A.2 Insight Partners – Periodic Tables of SaaS Metrics, 2014

Source LinkInsight’s Periodic Tables of B2B Digital Marketing Metrics, SaaS Sales Metrics and SaaS Financial Oper-ating Metrics

Publisher Insight Venture Partners

Published 2014

Base Insight’sPortfolioCompanies

Description

InsightVenturePartnersisaleadingglobalprivateequityandventurecapitalfirmfound-

ed in1995.The companyhas raisedmore than$8billionand invested inmore than200+

growth-stagesoftware,eCommerce, internet,anddata-servicescompanies.InsightVenture

hascreatedaseriesofPeriodicTablesforSaaSandSoftwarecompanies,including

Insight’s“PeriodicTableofB2BDigitalMarketingMetrics”providesthestatisticsandtac-

ticaltrendsthatInsightVenturePartnershascollectedfromitsportfoliocompaniesandob-

servedacrosstheindustry.ThePeriodicTablereflectsthecomplexityofthesoftwaremarket-

inglandscapebutisnotanexhaustivelistofallmarketingactivities

Insight’s“PeriodicTableofSaaSSalesMetrics”iscompiledfrombenchmarkinformation

gatheredfromitsSaaSportfoliocompaniesandpubliclyavailablesources.ThePeriodicTable

representsthecoremetricsthatshouldbemanagedbySalesExecutives

Insight’s“Periodic Table of SaaS Financial&OperatingMetrics” provides a framework

forthe‘dashboard’ofFinancialandOperatingmetricsthatcanbeusedtomonitortheoverall

healthandoperatingefficiencyofaSaaSbusiness,alongwithsomeadditionalstatisticsthat

speaktotacticaltrendsthatInsightVenturePartnershasobservedacrosstheindustry

ThesePeriodicTablesshouldbeusedinconjunction.ThePeriodicTablesfor‘SaaSSales

Metrics’and‘B2BDigitalMarketingMetrics’providetheunderpinningsofthebenchmarkfi-

nancialresultsthatappearinthe‘SaaSFinancialandOperatingMetrics’.Severalkeymetrics

varysignificantlyasafunctionofcompanysizeandmaturity,soinordertomorepreciselyrep-

resentthesebenchmarksthedatahasbeenbrokenintotwosegments:

• HyperGrowthcompanies(<$50Minannualrevenueand/orgrowing>50%p.a.)

and

• ScaleModelcompanies(>$50Minannualrevenueand/orgrowing<50%p.a.))

A.3 Tomasz Tunguz – Benchmarking Public SaaS Companies, 2014

Source Link Benchmarking SaaS Companies

Publisher Tomasz Tunguz – Redpoint Ventures

Published 2014

Base

Description

TomaszTunguzisaPartneratRedpointVentures.Heblogsatwww.tomtunguz.com.For

thisdeckonSlideshare,Tomaszanalyzedabasketof41publiclytradedSaaSCompanies.For

eachcompany,theprogresswasmeasuredyear-by-yearsincefounding.Thecompanieswere

segmentedbytheirACV.ThedeckincludesKeybenchmarksforSaaScompaniessuchasrev-

enue,customersuccess,sales,quotas,etc.

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A.4 Pacific Crest – SaaS Survey, 2014

Source Link 2014 Pacific Crest SaaS Survey – Part 1

Publisher ForEntrepreneurs / David Skok – Pacific Crest

Published 2014

Base

Description

DavidSkok,afivetimeserialentrepreneurturnedVCatMatrix,andDavidSpitz(@dspitz)

from PacificCrest,aninvestmentbankingfirmwithaspecificfocusonSaaS,worktogetherona

yearlybasis.In2014,theysurveyed200SaaScompaniesonavarietyoftopicssuchasgrowth

rates,CAC(costtoacquireacustomer),grossmargins,churnrates,etc.Thegoalofthesurvey

istoprovideusefuloperationalandfinancialbenchmarkingdata.

InLean_Markswearereferencinga fewsamplesof thissurvey.Thereport’sfirstpart

2014PacificCrestSaaSSurvey–Part1coversmetricson:

• Growth(mediangrowthratebycompanysize,salesmodel,targetcustomers)

• Go-to-marketApproach(primarysalesmodel,primarysalesmodelbymedianini-

tialcontractsize)

• Customer-acquisition-cost(CAC)(CACforfor$1ofnewACV,CACandshareof

newACVonnewcustomersvs.upsellsvs.renewals,CACbyprimarysalesmodel)

• Contracting&Pricing (medianannualcontractsize (ACV)percustomer, share

ofnewACVonnewcustomersvs.existingcustomers,newACVfromFreemiums/Free

trials),averagecontract length,averagebillingperiod,contract lengthbycontractsize,

primarypricingmetric)

• ProfessionalServices ImpactonGo-to-Market(in%of1st-yearACVby target

customer),subscriptiongrossmargins)

• SalesCommissions(bymediancontractsize,forrenewals,upsellsandmulti-year

deals)

 Thereport’ssecondpart2014PacificCrestSaaSSurvey–Part2coversmetricson:

• CostStructure(grossmargin,OPEX(S&M,R&D,G&A,EBITDA,FCF),growthrate,

mediancoststructurebysizeandSales&Marketingspendvs.projectedgrowthrate)

• Churnand retention(annual grossdollar churn, annual customer churn, churn

bycontractlength,contractsize,primarydistributionmode,annualnetdollarretention

fromexistingcustomers)

• CapitalRequirements(capitalraised,analysisofcompaniesbycapitalraised,capi-

talefficiencyexpectations–medianlevelsforthegroup,actual/expectedtimeandinvest-

mentrequiredtoreach,ACVatwhichyouexpecttohaveFCF+)

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A.5 HubSpot Blogs – Your Daily Dose of Inbound, 2015

Source Link HubSpot Blogs

Publisher HubSpot Blogs

Published 2015

Base 900Markerters–7000+Businesses

Description

HubSpotwas founded in2006asa resultofa simpleobservation:peoplehave trans-

formedhowtheylive,work,shop,andbuy,butbusinesseshavenotadapted.Thismismatch

ledBrianHalliganandDharmeshShahtocreatethevisionfortheinboundexperienceandto

developHubSpot’splatformtosupportit.Withthepowerful,easytouse,integratedsetofap-

plications,businessescanattract,engage,anddelightcustomersbydeliveringinboundexperi-

encesthatarerelevant,helpful,andpersonalized.HubSpotis,afterall,onamissiontomake

theworldmoreinbound,onebusinesstransformationafteranother.This“DemandGenera-

tionBenchmarks&Trends:SoftwareMarketerEdition”reportconsistsofdatafromover900

othermarketersacrossallindustries.You’llseestatslike:

• Funnel benchmarks – including visitors, leads, MQLs and opportunities – for

companieshavingthemostsuccess(andthosethataren’t)

• Cost per lead benchmarks by revenue achievement, annual revenue, industry

andcompanysize

• Emailopenandclickthroughrates

• Marketinginvestmentsbytactic

A.6 Implisit – B2B Sales Conversion Rates, 2014

Source LinkB2B Sales Conversion Rates – Lead to Opportunity, Lead to Deal

Publisher Implisit

Published 2014

Base 100++

Description

ImplisitincreasesSalesWinRateswithPredictiveAnalyticsAlgorithmsthatidentifypatterns

andsentimentincustomeremailsandrecommendinstantimprovements.Implisittechnologyup-

datesyourCRMseamlesslyandeffortlessly.Theuniquefeaturesmatchclientandprospectcom-

municationstoCRMrecords,andcreatemissingcontacts.Inaddition,Implisitwillupdateyour

CRMfieldstoprovideyouwithaccurateandup-to-dateforecastatanytime.Implisitpublishesim-

pressiveinfographics,eBooks,whitepapersandmanualstohelpyougetthemostoutofyourCRM.

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A.7 Totango – Annual SaaS Metric Survey Report, 2014

Source Link Totango – Annual SaaS Metric Survey Report

Publisher Totango

Published 2014

Base 500SaaSprofessionals(500companies)

Description

Totangoprovidescompanieswithcustomerinsightsthathelpunderstandwhichcustom-

ersneedattentionandwhy,bymonitoringcustomerbehaviorandusageinapplications–along

withcriticalrelationshipdatafromCRM,billing,andothersystems.

In2014,Totango surveyedover500SaaSprofessionalsfrom500companiesaboutthe

keyperformanceindicatorsusedtoruntheirbusinesses,revealinguniqueinsightsintoSaaS

trends.Theparticipatingcompaniesinclude:

• 93companieswithannualrevenue<$1M

• 190companieswithannualrevenuebetween$1Mand$10M

• 112companieswithannualrevenuebetween$10Mand$50M

• 39companieswithannualrevenuebetween$50Mand$100M

• 50companieswithannualrevenue>100$M

Thesurveyrevealsresultsfor:

• Satisfaction with SaaS metrics

• Differentfocusesoncustomeracquisition,renewalsandupsells

• Mostimportantcustomermetrics

• RetentionandAcquisitioncosts

• NewbusinesscomingfromFreetrialsversusFreemium

• Churn measurements

• Revenueincreasefromexistingcustomers

A.8 The Bridge Group – Sales Development and Inside Sales Reports on Metrics & Compensation, 2014

Source Link The Bridge Group – Resources

Publisher The Bridge Group, Inc.

Published 2015

Base >200B2BTechnologyCompanies

Description

TheBridgeGroupspecializes inbuilding,expandingandoptimizing insidesalesstrate-

giesforsmarttechnologycompanies.TheBridgeGrouppublishedsomegreatInsideSalesRe-

sources:

The2014SalesDevelopmentReportonMetrics&Compensationistheirfifthroundof

researchsince2007withafocusonhowmetrics&compensationchangeovertime.Inthis

round,222B2BtechnologycompanieswithSalesDevelopmentTeamsweresurveyed,most

offerSaaSandSoftwaresolutions.Thereportcovers theSalesDevelopmentModel tasked

withPipelinegeneration,appointmentsetting, leadqualificationandoutboundprospecting.

Thereportreveals:

• HowtheSalesDevelopment(SDR)Groupsaremadeup(numberofreps,territo-

ries,experiencelevel,averagetenure,rampup,teamstructure)

• SDRQuotas (basisofquota, averagequotabasedonACV,averagenumberof

deals,quotaachievement)

• Salesefficiency(averagenumberofdailydials,dialattemptsandconnects)

• Incentives&Compensation(OTE,durationofaSPIF)

 

The2015SaaSInsideSalesReportonMetrics&Compensationcoversthemetricsfor

InsideSalesGroupswithinSaaScompanies,definedasRepsowningtheentiresalescycleas

anindividualcontributorand/orRepsinateamsellingmodelsharingaterritorywithafield

partner.Thereportreveals:

• HowInsideSalesGroupsaremadeup(numberofreps,territories,segmentation

intohuntersandfarmers,experiencelevel,averagetenure,rampup)

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• Salesquotas (basisofquota, averagequotabasedonACV,averagenumberof

deals,quotaachievement)

• Salesefficiencymetrics (averagenumberofdailydials,dialsattemptsandcon-

nects)

• Incentives&Compensation(OTE)

• Topchallengesforsalesteams

AuthorsPeterGraceyandMattBertuzzihavebuiltTheBridgeGroup–SalesDevelop-

mentOutbound Index–an IndexontransactionalCRMdata,afteranalyzingmorethan40

outboundprospectorsandlargevolumesoflead,activity,andopportunitydata.TheIndexcon-

sistsof3KPIs:

• ReachRate:Whatpercentageofaccountsengageinatleastonemeaningful,for-

ward-progressingsalesconversation?

• PassRate:WhatpercentageofreachedaccountsarepassedbyaSDRtoaSales

counterpart?

• PipelineRate:WhatpercentageofSDR-passedaccountsareacceptedintothe

salespipeline?

A.9 InsightSquared – New Benchmarks for Inside Sales Teams, 2014

Source LinkInsightSquared – New Benchmarks for Inside Sales Teams

InsightSquared

Published 2014

Base 50+companies

Description

Authors Zorian Rotenberg and Nick Christman from InsightSquared aggregated 12

monthsofdetailedsalesdataformorethan50growingsoftwarecompanieswithinsidesales

teamstoprovideyouwithsomebenchmarksthathelpmeasuresalesteam’sperformanceon

somenewdimensions.

Thebenchmarkanswersanumberofimportantquestions:

• Howdoesthesalesprocessdifferforcompaniesgrowingatmorethan20%per

year?(Conversionrates,Averagedealsizes,Numberofbookingsperrepetc.)

• Arebigdealsworthit?(Salescycles,Saleseffort,Winrates,Dollarpereffort,etc.)

• How much performance variance within your sales team should you

expect?(Numberofdeals,Dealsizes,Winratesbyrepperformancequartileetc.)

• Areyouspendingtoomuchchasingbaddeals?(Win/Losscycles,Win/Lossdeal

sizes,Salestasksperwin/lossdealetc.)

Theauthorssplitsoftwarecompaniesintotwogroupsbasedonsalesgrowth:

• Fastgrowth:100%+growthinthelast12months

• Slowgrowth:0-100%growthintthelast12months

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A.10 Xactly – SaaS Incentive Compensation Benchmark Report, 2014

Source LinkXactly – SaaS Incentive Compensation Benchmark Report

Publisher Xactly Corporation

Published 2014

Base >100companies

Description

Xactlytakesincentivecompensationfromadarkarttoascience,providingdecision-mak-

erswiththedatainsightstheyneedtotapthemotivationalpoweroftheirincentivecompensa-

tion.

Xactly analyzedthesalesandincentivecompensationpatternsofSaaScompaniesdur-

ing2013topinpointtheimpactofcompensationonsalesperformance.Inthisdynamic,high-

growthenvironment,incentivecompensationcanplayakeyroleindeterminingthesuccessor

failureofabusiness.Forthestudy,Xactlyleverageditsbigdataplatformthatincludesaggre-

gatedandanonymousempiricaldata.

Thefindingsreveal:

• Incentiveplandesign

• Medianquota size foraprimaryquota-carrying sales representative (Account

Executive)

• Average quota attainment

• Salesattrition

A.11 Salary.com – Average Salary Ranges for Sales Jobs, 2015

Source LinkAverage Salary Ranges for Sales Jobs in the Software & Networking Industry

Publisher Salary.com

Published 2015

Base U.S. National Average

Description

IfyouwanttolearnaboutaveragesalaryrangesforSales(mostlyintheU.S.),thenyou

cansimplybrowseAverageSalaryRangesforSalesJobsonSalary.Com.Thereareawiderange

ofjobsintheSalescategoryandtheirpayvariesgreatly.Ifyouknowthepaygradeofthejob

youaresearchingforyoucannarrowdownthislisttoonlyviewSalesjobsthatpaylessthan

$30K,$30K-$50K,$50K-$80K,$80K-$100K,ormorethan$100K. Ifyouareunsurehow

muchyourSalesjobpaysyoucanchoosetoeitherbrowseallSalessalariesbeloworyoucan

searchallSalessalaries.OtherrelatedcategoriesyoumaywishtobrowseareMarketingjobs

andCustomerServicesjobs.

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A.12 Zendesk Bechmark – Behavioral Cues of Customer Satisfaction, 2014

Source Link Zendesk Bechmark – Behavioral Cues of Customer

Publisher Zendesk

Published 2014

Base over25,000customers

Description

TheZendeskBenchmarkcombinessupportdatafromover25,000participatingZendesk

customers.Thisdataisaglobal,up-to-datesourceofcustomersupportknowledge.AndBench-

markreportsarebuiltintoyourZendesk,soquantitativeinsightisalwayscloseathand.

TheBehavioralCuesofCustomerSatisfactionWhitepaperprovidesinsightsintoCus-

tomerSatisfaction,forexampleby:

• Countries

• Industry

• Politenessofcustomers

• Emailprovider

• …andmore

UsetheZendeskBenchmarktomeasureyoursupportqualityonseveralmetrics,com-

pareyourcompanytoyourcompetitors,anddiscovernewstrategiestoraiseyourcustomer

satisfaction.

A.13 Openview – State of B2B Mobile Growth Metrics, 2015

Source Link State of B2B Mobile Growth Metrics

Publisher Openview Venture Partners

Published 2015

Base 60

Description

OpenViewVenturePartnersisanAmericanventurecapitalfirmbasedinBoston.Open-

Viewspecializes inexpansionstagesoftware,newmedia, Internet, and technologyenabled

companies.Mobileappsarethenextbigwave inB2BSaaS.Aswasthecasewiththe initial

adoptionofSaaS,Openviewfeelsthatthereisaneedfornewmetricsthatcanserveasmore

appropriateandaccurate indicatorsofmobileperformance.TheaccesstoSaaSmetricshas

playedamajorrole inthe industry’sdramaticgrowth.Withthem,SaaSentrepreneurshave

beenbetterabletounderstandwhattomeasure,whereto invest,andwhentopullcertain

leverstodrivemoreeffective,sustainablegrowthintheircompanies.Intheemergenceofthe

emergenceofmobileB2BSaaS,OpenviewseesanewoffshootofthetraditionalSaaSmodel.

MobileSaaSbusinessesare fundamentallydifferent fromtheirnon-mobilecounterparts. In

fact,duetothebring-your-own-devicemovementanddifferenteconomicmodels,currentus-

ersandusergrowthcanoftenmatterasmuch, ifnotmore,thancurrentrecurringrevenue.

Openview had several conversations with founders and investors in themobile B2B SaaS

spacewhounanimouslyagreethatmobileB2BSaaSneedsadistinctsetofmetricstomeasure

performanceandgrowth.Thesurvey’srespondentsincludedover60seniorexecutiveswho

sharedtheircompany’sdatainseveralkeycategories,helpingtobetterunderstandtheele-

mentsthatbestreflectaB2BSaaScompany’smobilehealth.

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A.14 Kaseya – MSP Global Pricing Survey, 2014

Source Link Kaseya’s MSP Global Pricing Survey

Publisher Kaseya

Published 2014

Base 700MSPsfrom30countries

Description

KaseyaprovidesITsystemsmanagementsoftwarethathelpsmanagedserviceproviders

(MSPs)andmid-marketenterprisesdrivegrowth,innovation,andmostimportantly,custom-

ersuccess.Kaseya’ssolutionsareusedbymorethan10,000customersworldwidetoman-

ageoverfivemilliondevicesacrossawidevarietyofindustries.Kaseyahasaleadingposition

amongMSPsaroundtheglobe.ThisleadingmarketpositiongivesKaseyaauniqueperspective

fromwhichtostudybothpricingandservicedeliverytrendsintheglobalITservicesindustry.

Theresultsprovidevisibilityintothetypes–andportfolios–ofITservicesthatMSPsdeliver

toclients,includingmanagedservicesofferedbyawiderangeofMSPsfromthemanysmall

providerstosomeofthelargestandmostprogressiveMSPsinthemarkettoday.Kaseyagath-

ereddetailsfromKaseyaMSPsontheexistingandemergingtypesofservicestheyoffer,their

currentservicepricingandfuturepricingexpectations,andonthekeychallengestheircus-

tomersface,withparticularemphasisonthemostimportantITservicemanagementtrends

today—cloudandmobility.Thefindingsaregatheredfromownersandoperatorsofnearly

700MSPfirmsofallsizes,spreadacrossmorethan30countries.

About the Author

Eckhard OrtweinEntrepreneur | SaaS Consultant | M&A Advisor

Connect with me if you want to talk about SaaS

BusinessModels,SaaSInvestmentsandSaaSStrategies.

I am a Serial Entrepreneur co-founding cyber-security

startup accells acquired by Ping Identity in 2014 and

co-founding the m-payment startup paybox acquired

bySybase/SAP in2008.WithMoveToSaaS,wespecial-

ize inbusinessmodellingandsimulation,financialplan-

ning,benchmarkingandboardcommunicationforSaaScompaniesandSaaSstartupsaswell

asforSoftwarecompanieswhichwanttoMove-to-SaaS.We’vebeenparticularlysuccessful

withstartupsandcompaniesthatarestrugglingtocreateafinancialplanfortheirfundraising,

thatareconcernedaboutcreatingabusinessmodelsimulatingtheirstrategicoptions,thatare

unhappyabouttheinefficienciesincommunicatingregularlywiththeirboardsandinvestors

andthataredisappointedabouttheirfinancialperformanceversuspeers.Weareproviding

customizedsolutionsforlargercompanies,buthavealsobeenabletocreatestandardtools

andprocessesforstartups.Ihavemorethan20yearsworkingasastartupfounder,industry

executiveandmanagementconsultantforglobalcorporationsandstart-upsintelecommuni-

cations,professionalandfinancialserviceandconsumergoodsindustries.