<10MO
$10-$100M
$100M+
<10M
$10-$100M
$100M+
SaaS Sales Periodic Table
The SaaS Quick Ratio measures a company’s ability to overcome churn, aka the “leaky bucket issue.” The optimal ratio of new and upsell to churn and downsell is generally ~4x or higher. Lower ARR companies tend to have higher ratios given they are hyper focused on new sales to capture market share and have a smaller installed customer base (i.e. less opportunity to churn).
SaaS Quick Ratio
5X+
(New + Upsell ARR)
(Churn + Downsell ARR)
ARR Band
5x+
5x+
5x+
<25K ASP
25-75K ASP
>75K ASP
CAC Payback Months (Rev)
12-18 months
CAC payback period tells you how many months after acquiring a cohort of customers you recoup your upfront investment. Lower ASP companies are likely to have shorter CAC payback periods, because they tend to be hyper focused on fast paced growth. Companies with higher LTV (lifetime value) for customers can support a higher CAC payback period.
12 months
12-15 months
12-18 months
<25K ASP
25-75K ASP
>75K ASP
Previous period S&M expense
Current period new & upsell ARR
X 12
Gross Sales Efficiency
.5-1X
Sales Efficiency is a measure of how efficiently dollars spent on sales and marketing translate to new ARR. The metric measures how much ARR is generated for every one dollar spent.
0.5-1x
0.5-1x
0.5-0.75x
<25K ASP
25-75K ASP
>75K ASP
Current period new ARR
Previous period S&M expense
NRR
105-120%+
Net Revenue Retention, which includes expansion, downsell, and churn, indicates how much revenue a company can expect next year from this year’s customer base.
105%
120%+
120%+
<25K ASP
25-75K ASP
>75K ASP
Starting ARR + Expansion ARR - Downsell ARR - Churn ARR
Starting ARR
GRR
85-95%+
Gross Revenue Retention (GRR) indicates if a company has good product-market fit, competitive pricing, and strong customer service.
85-90%
90-95%
95%+
<25K ASP
25-75K ASP
>75K ASP
Starting ARR - Downsell ARR - Churn ARR
Starting ARR
YoY ARR Growth
150%+
YoY ARR Growth is the annual percentage change in ending ARR. Companies with lower ARR tend to have higher ARR growth as they have a lower starting value.
150%+
150%+
150%+
<25K ASP
25-75K ASP
>75K ASP
Ending ARR
Starting ARR
-1
Win Rate
30%+
We calculate win rate as the closed won dollars as a percentage of the total closed won and close lost opportunities. The metric can be used to measure sales effectiveness. Win rates have a direct effect on pipeline coverage. If a company wins a high percentage of opportunities (high win rate) it can achieve targets with a lower pipeline coverage ratio.
30%+
30%+
30%+
<25K ASP
25-75K ASP
>75K ASP
Closed won opportunities ($)
Closed won + closed lost opportunities ($)
New as a % of
(New+Expansion)
75-90%
New as a percentage of (new + expansion) provides insight into a SaaS company's ability to attract new customers, diversify its revenue streams, and maintain a healthy balance between growth through existing customers (expansion) and new customer acquisition, all of which are critical for the sustainability and scalability of the business.
80-90%
75-90%
75-90%
<25K ASP
25-75K ASP
>75K ASP
New ARR
(New + Expansion ARR)
Quota to OTE ratio
5x
Best practice quota to compensation ratio is 5x. The ratio can be driven by a variety of factors: territory size, product market fit, average deal size, etc. If you find your ratio is lower, first investigate root causes prior to making any comp/quota changes.
5x
5x
5x
<25K ASP
25-75K ASP
>75K ASP
Total Annual Quota
Total Annual OTE
Outbound BDR SQL quotas (per month)
7-13 per month
Most XDR teams are measured on the number of SQLs generated. Outbound XDR qualification criteria is focused on finding the right people with a need that aligns to the solution’s value at a company, either in the company’s ICP, or close to it.
11-13 per month
9-11 per month
7-9 per month
<25K ASP
25-75K ASP
>75K ASP
Monthly SQL Quotas
Quota Over Assignment
15-20%
Over-assigning quotas is a common strategy that companies utilize to ensure sales team meet the board determined target. However, over-assigning to the point that quotas are unattainable can demotivate reps and may indicate there was an issue in setting realistic targets.
15-20%
15-20%
15-20%
<25K ASP
25-75K ASP
>75K ASP
Total Quota Deployed
Board Plan
AE Variable Compensation % of OTE
50%
As sales reps have the largest influence in the sales process, they usually carry more aggressive pay mixes (e.g., 50/50), which allows for more risk with increased upside.
50%
50%
50%
<25K ASP
25-75K ASP
>75K ASP
AE Variable OTE
AE Full OTE
BDR Variable Compensation % of OTE
30%
BDRs generally have lower impact on sales process results relative to AEs and have a lower variable % of their OTE.
30%
30%
30%
<25K ASP
25-75K ASP
>75K ASP
BDR Variable OTE
BDR Full OTE
SE Variable Compensation % of OTE
20%
Variable components also decrease for those measured on team quotas, like a solutions engineer, to incentivize more collaboration on shared goals.
20%
20%
20%
<25K ASP
25-75K ASP
>75K ASP
SE Variable OTE
SE Full OTE
AE Ramp Time
3-12 months
We recommend companies look at ramp time as time to full productivity (carrying a full quota), not time to first sale. Ramp time is most closely correlated to sales cycle length. Organizations with long sales cycles will typically have longer ramp times, as the rep will need time to build pipeline and experience a full sales cycle before being fully trained.
3-6 months
6-9 months
9-12 months
<25K ASP
25-75K ASP
>75K ASP
Time to Full Productivity (i.e. carrying a fully ramped quota)
BDR Ramp Time
3-5 months
The average tenure of a BDR/SDR is 1-2 years, so high functioning inside sales organizations are especially skilled at handling turnover. One of the most important aspects of increasing employee retention is ramping new hires as quickly and effectively as possible. To accelerate BDR/SDR ramp, companies must have the right hiring profile and a well-functioning onboarding system in place.
3-5 months
3-5 months
3-5 months
<25K ASP
25-75K ASP
>75K ASP
Time to Full Productivity (i.e. carrying a fully ramped quota)
Span of control
6-8:1
A high span of control reduces the time for training and development of individual contributors and may lower overall team productivity and risk of attrition. We recommend a span of between 6:1 and 8:1.
6-8:1
6-8:1
6-8:1
<25K ASP
25-75K ASP
>75K ASP
# of Individual Contributors
# of First Line Managers
Average Sales Cycle
1-9 months
Average sales cycle is often correlated with average sales price (ASP). Companies with higher ASPs, that also sell into large enterprise companies, typically have a longer sales cycle due to the number of stakeholders involved in the sales process and larger budgets that need to be secured. Companies with ASP significantly above $75K may see sales cycles extend to 12 months+.
1-2 months
3-4 months
4-9 months
<25K ASP
25-75K ASP
>75K ASP
The length of time between the creation of an opportunity with a prospective customer to when the deal is signed and closed (months)
Pipeline Coverage
2-5X
Pipeline Coverage is pivotal for ensuring the predictability of revenue and managing risk. Companies should strategically enhance their lead generation efforts and refine sales conversion processes, to ensure a continuous and sufficient influx of potential deals to meet or exceed sales targets.
2x
3-4x
4-5x
<25K ASP
25-75K ASP
>75K ASP
Open pipeline for a given time period
Quota for a given time period
Sales Headcount % of FTEs
15-30%
The ratio of sales headcount to overall company headcount. Early stage companies typically prioritize sales before building out additional functions and therefore have a higher ratio. Later stage companies typically have built out more functions such as operations, marketing, and finance, and therefore the ratio will decrease over time.
15-30%
15-30%
15-30%
<25K ASP
25-75K ASP
>75K ASP
Sales Headcount
Total Headcount
Sales Expense % of OpEx
30-35%
A measure of how much of spending is dedicated to selling and operations related to selling (AE, BDRs, ops, support, etc.) as compared to total operating spend. Early stage companies, focused on fast paced growth, tend to have higher ratios as they prioritize spend in sales and lead generation to capture market share and build brand awareness.
30-35%
30-35%
30-35%
<25K ASP
25-75K ASP
>75K ASP
Sales Expense
Total Operating Expense
Sales Expense % of OpEx
25-35%
A measure of how much of spending is dedicated to selling and operations related to selling (AE, BDRs, ops, support, etc.) as compared to total operating spend. Early stage companies, focused on fast paced growth, tend to have higher ratios as they prioritize spend in sales and lead generation to capture market share and build brand awareness.
25-35%
25-35%
25-35%
<25K ASP
25-75K ASP
>75K ASP
Sales Expense
Total Operating Expense
Sales Headcount % of FTEs
15-30%
The ratio of sales headcount to overall company headcount. Early stage companies typically prioritize sales before building out additional functions and therefore have a higher ratio. Later stage companies typically have built out more functions such as operations, marketing, and finance, and therefore the ratio will decrease over time.
15-30%
15-30%
15-30%
<25K ASP
25-75K ASP
>75K ASP
Sales Headcount
Total Headcount
Pipeline Coverage
2-5X
Pipeline Coverage is pivotal for ensuring the predictability of revenue and managing risk. Companies should strategically enhance their lead generation efforts and refine sales conversion processes, to ensure a continuous and sufficient influx of potential deals to meet or exceed sales targets.
2x
3-4x
4-5x
<25K ASP
25-75K ASP
>75K ASP
Open pipeline for a given time period
Quota for a given time period
Average Sales Cycle
1-9 months
Average sales cycle is often correlated with average sales price (ASP). Companies with higher ASPs, that also sell into large enterprise companies, typically have a longer sales cycle due to the number of stakeholders involved in the sales process and larger budgets that need to be secured. Companies with ASP significantly above $75K may see sales cycles extend to 12 months+.
1-2 months
3-4 months
4-9 months
<25K ASP
25-75K ASP
>75K ASP
The length of time between the creation of an opportunity with a prospective customer to when the deal is signed and closed (months)
Span of control
6-8:1
A high span of control reduces the time for training and development of individual contributors and may lower overall team productivity and risk of attrition. We recommend a span of between 6:1 and 8:1.
6-8:1
6-8:1
6-8:1
<25K ASP
25-75K ASP
>75K ASP
# of Individual Contributors
# of First Line Managers
BDR Ramp Time
3-5 months
The average tenure of a BDR/SDR is 1-2 years, so high functioning inside sales organizations are especially skilled at handling turnover. One of the most important aspects of increasing employee retention is ramping new hires as quickly and effectively as possible. To accelerate BDR/SDR ramp, companies must have the right hiring profile and a well-functioning onboarding system in place.
3-5 months
3-5 months
3-5 months
<25K ASP
25-75K ASP
>75K ASP
Time to Full Productivity (i.e. carrying a fully ramped quota)
AE Ramp Time
3-12 months
We recommend companies look at ramp time as time to full productivity (carrying a full quota), not time to first sale. Ramp time is most closely correlated to sales cycle length. Organizations with long sales cycles will typically have longer ramp times, as the rep will need time to build pipeline and experience a full sales cycle before being fully trained.
3-6 months
6-9 months
9-12 months
<25K ASP
25-75K ASP
>75K ASP
Time to Full Productivity (i.e. carrying a fully ramped quota)
SE Variable Compensation % of OTE
20%
Variable components also decrease for those measured on team quotas, like a solutions engineer, to incentivize more collaboration on shared goals.
20%
20%
20%
<25K ASP
25-75K ASP
>75K ASP
SE Variable OTE
SE Full OTE
BDR Variable Compensation % of OTE
30%
BDRs generally have lower impact on sales process results relative to AEs and have a lower variable % of their OTE.
30%
30%
30%
<25K ASP
25-75K ASP
>75K ASP
BDR Variable OTE
BDR Full OTE
AE Variable Compensation % of OTE
50%
As sales reps have the largest influence in the sales process, they usually carry more aggressive pay mixes (e.g., 50/50), which allows for more risk with increased upside.
50%
50%
50%
<25K ASP
25-75K ASP
>75K ASP
AE Variable OTE
AE Full OTE
Quota Over Assignment
15-20%
Over-assigning quotas is a common strategy that companies utilize to ensure sales team meet the board determined target. However, over-assigning to the point that quotas are unattainable can demotivate reps and may indicate there was an issue in setting realistic targets.
15-20%
15-20%
15-20%
<25K ASP
25-75K ASP
>75K ASP
Total Quota Deployed
Board Plan
Outbound BDR SQL quotas (per month)
7-13 per month
Most XDR teams are measured on the number of SQLs generated. Outbound XDR qualification criteria is focused on finding the right people with a need that aligns to the solution’s value at a company, either in the company’s ICP, or close to it.
11-13 per month
9-11 per month
7-9 per month
<25K ASP
25-75K ASP
>75K ASP
Monthly SQL Quotas
Quota to OTE ratio
5X
Best practice quota to compensation ratio is 5x. The ratio can be driven by a variety of factors: territory size, product market fit, average deal size, etc. If you find your ratio is lower, first investigate root causes prior to making any comp/quota changes.
5x
5x
5x
<25K ASP
25-75K ASP
>75K ASP
Total Annual Quota
Total Annual OTE
New as a % of
(New+Expansion)
50-60%
New as a percentage of (new + expansion) provides insight into a SaaS company's ability to attract new customers, diversify its revenue streams, and maintain a healthy balance between growth through existing customers (expansion) and new customer acquisition, all of which are critical for the sustainability and scalability of the business.
60%
55%
50%
<25K ASP
25-75K ASP
>75K ASP
New ARR
(New + Expansion ARR)
Win Rate
30%+
We calculate win rate as the closed won dollars as a percentage of the total closed won and close lost opportunities. The metric can be used to measure sales effectiveness. Win rates have a direct effect on pipeline coverage. If a company wins a high percentage of opportunities (high win rate) it can achieve targets with a lower pipeline coverage ratio.
30%+
30%+
30%+
<25K ASP
25-75K ASP
>75K ASP
Closed won opportunities ($)
Closed won + closed lost opportunities ($)
YoY ARR Growth
60-80%
YoY ARR Growth is the annual percentage change in ending ARR. Companies with lower ARR tend to have higher ARR growth as they have a lower starting value.
60-80%
60-80%
60-80%
<25K ASP
25-75K ASP
>75K ASP
Ending ARR
-1
Starting ARR
GRR
85-95%+
Gross Revenue Retention indicates if a company has good product-market fit, competitive pricing, and strong customer service.
85-90%
90-95%
95%+
<25K ASP
25-75K ASP
>75K ASP
Starting ARR - Downsell ARR - Churn ARR
Starting ARR
NRR
105-120%+
Net Revenue Retention, which includes expansion, downsell, and churn, indicates how much revenue a company can expect next year from this year’s customer base.
105%
120%+
120%+
<25K ASP
25-75K ASP
>75K ASP
Starting ARR + Expansion ARR - Downsell ARR - Churn ARR
Starting ARR
Gross Sales Efficiency
.5-1X+
Sales Efficiency is a measure of how efficiently dollars spent on sales and marketing translate to new ARR. The metric measures how much ARR is generated for every one dollar spent.
.75-1x+
.75-1x+
.5-.75x
<25K ASP
25-75K ASP
>75K ASP
Current period new ARR
Previous period S&M expense
CAC Payback Months (Rev)
12-18 months
CAC payback period tells you how many months after acquiring a cohort of customers you recoup your upfront investment. Lower ASP companies are likely to have shorter CAC payback periods, because they tend to be hyper focused on fast paced growth. Companies with higher LTV (lifetime value) for customers can support a higher CAC payback period.
12 months
12-15 months
12-18 months
<25K ASP
25-75K ASP
>75K ASP
Previous period S&M expense
Current period new & upsell ARR
X 12
SaaS Quick Ratio
4-5X
The SaaS Quick Ratio measures a company’s ability to overcome churn, aka the “leaky bucket issue.” The optimal ratio of new and upsell to churn and downsell is generally ~4x or higher. Lower ARR companies tend to have higher ratios, given they are hyper-focused on new sales to capture market share and have a smaller installed customer base (i.e. less opportunity to churn).
5x+
5x+
5x+
<25K ASP
25-75K ASP
>75K ASP
(New + Upsell ARR)
(Churn + Downsell ARR)
SaaS Quick Ratio
5x+
CAC Payback Months
12-18 months
Gross Sales Efficiency
.5-1x
NRR
105-120%
GRR
85-95%+
YoY ARR Growth
150%+
Sales Efficiency
Sales Performance
Win-Rate
30%+
New as a % of (new+expansion)
75-90%
Quota to OTE Ratio
5x
Outbound BDR SQL quotas
7-13 per month
Quota Over Assignment
15-20%
AE Variable Compensation
% of OTE
50%
BDR Variable Compensation % of OTE
30%
SE Variable Compensation
% of OTE
20%
AE Ramp Time
3-12 months
BDR Ramp Time
3-5
months
Span of Control
6-8:1
Average Sales Cycle
1-9
months
Pipeline Coverage
2-5X
Sales Headcount as a % of FTEs
15-30%
Sales Expense % of OpEx
30-35%
Quota and Comp
Sales Capacity
Gross Sales Efficiency
.5-1x+
CAC Payback Months
12-18 months
GRR
85-95%+
NRR
105-120%+
SaaS Quick Ratio
4-5X
New as a % of (new+expansion)
50-60%
Win-Rate
30%+
YoY ARR Growth
60-80%
Quota Over Assignment
15-20%
Outbound BDR SQL quotas
7-13 per month
Quota to OTE Ratio
5x
AE Variable Compensation
% of OTE
50%
BDR Variable Compensation % of OTE
30%
SE Variable Compensation
% of OTE
20%
AE Ramp Time
3-12 months
BDR Ramp Time
3-5
months
Span of Control
6-8:1
Average Sales Cycle
1-9
months
Pipeline Coverage
2-5X
Sales Headcount as a % of FTEs
15-30%
Sales Expense % of OpEx
25-35%
Gross Sales Efficiency
1x+
CAC Payback Months
12-18 months
GRR
85-95%+
NRR
110-120%+
SaaS Quick Ratio
2-4X
New as a % of (new+expansion)
45-55%
Win-Rate
30%+
YoY ARR Growth
40-50%
Quota Over Assignment
10%+
Outbound BDR SQL quotas
7-13 per month
Quota to OTE Ratio
5x
AE Variable Compensation
% of OTE
50%
BDR Variable Compensation % of OTE
30%
SE Variable Compensation
% of OTE
20%
AE Ramp Time
3-12 months
BDR Ramp Time
3-5
months
Span of Control
6-8:1
Average Sales Cycle
1-9
months
Pipeline Coverage
2-5X
Sales Headcount as a % of FTEs
10-20%
Sales Expense % of OpEx
25-30%
Sales Expense % of OpEx
25-30%
A measure of how much of spending is dedicated to selling and operations related to selling (AE, BDRs, ops, support, etc.) as compared to total operating spend. Early stage companies, focused on fast paced growth, tend to have higher ratios as they prioritize spend in sales and lead generation to capture market share and build brand awareness.
25-30%
25-30%
25-30%
<25K ASP
25-75K ASP
>75K ASP
Sales Expense
Total Operating Expense
Sales Headcount % of FTEs
10-20%
The ratio of sales headcount to overall company headcount. Early stage companies typically prioritize sales before building out additional functions and therefore have a higher ratio. Later stage companies typically have built out more functions such as operations, marketing, and finance, and therefore the ratio will decrease over time.
10-20%
10-20%
10-20%
<25K ASP
25-75K ASP
>75K ASP
Sales Headcount
Total Headcount
Pipeline Coverage
2.0-5X
Pipeline coverage is a ratio to measure how much pipeline a company has compared to the amount of quota deployed. Companies with lower ASPs tend to have a higher % of their bookings Created & Closed in period, and therefore require lower starting coverage.
2.0x
3-4x
4-5x
<25K ASP
25-75K ASP
>75K ASP
Open pipeline for a given time period
Quota for a given time period
Average Sales Cycle
1-9 months
Average sales cycle is often correlated with average sales price (ASP). Companies with higher ASPs, that also sell into large enterprise companies, typically have a longer sales cycle due to the number of stakeholders involved in the sales process and larger budgets that need to be secured. Companies with ASP significantly above $75K may see sales cycles extend to 12 months+.
1-2 months
3-4 months
4-9 months
<25K ASP
25-75K ASP
>75K ASP
The length of time between the creation of an opportunity with a prospective customer to when the deal is signed and closed (months)
Span of control
6-8:1
A high span of control reduces the time for training and development of individual contributors and may lower overall team productivity and risk of attrition. We recommend a span of between 6:1 and 8:1.
6-8:1
6-8:1
6-8:1
<25K ASP
25-75K ASP
>75K ASP
# of Individual Contrutors
# of First Line Managers
BDR Ramp Time
3-5 months
The average tenure of a BDR/SDR is 1-2 years, so high functioning inside sales organizations are especially skilled at handling turnover. One of the most important aspects of successful turnover is ramping new hires as quickly and effectively as possible. To maximize BDR/SDR ramp, companies must have the right hiring profile and a well-functioning onboarding system in place.
3-5 months
3-5 months
3-5 months
<25K ASP
25-75K ASP
>75K ASP
Time to Full Productivity (i.e. carrying a fully ramed quota)
AE Ramp Time
3-12 months
We recommend companies look at ramp time as time to full productivity (carrying a full quota), not time to first sale. Ramp time is most closely correlated to sales cycle length. Organizations with long sales cycles will typically have longer ramp times, as the rep will need time to build pipeline and experience a full sales cycle before being fully trained.
3-6 months
6-9 months
9-12 months
<25K ASP
25-75K ASP
>75K ASP
Time to Full Productivity (i.e. carrying a fully ramed quota)
SE Variable Compensation % of OTE
20%
Variable components also decrease for those measured on team quotas, like a solutions engineer, to incentivize more collaboration on shared goals.
20%
20%
20%
<25K ASP
25-75K ASP
>75K ASP
SE Variable OTE
SE Full OTE
BDR Variable Compensation % of OTE
30%
BDRs generally have lower impact on sales process results relative to AEs and have a lower variable % of their OTE.
30%
30%
30%
<25K ASP
25-75K ASP
>75K ASP
BDR Variable OTE
BDR Full OTE
AE Variable Compensation % of OTE
50%
As sales reps have the largest influence in the sales process, they usually carry more aggressive pay mixes (e.g., 50/50), which allows for more risk with increased upside.
50%
50%
50%
<25K ASP
25-75K ASP
>75K ASP
AE Variable OTE
AE Full OTE
Quota Over Assignment
10%+
Over-assigning quotas is a common strategy that companies utilize to ensure sales team meet the board determined target. However, over-assigning to the point that quotas are unattainable can demotivate reps and may indicate there was an issue in setting realistic targets.
10%+
10%+
10%+
<25K ASP
25-75K ASP
>75K ASP
Total Quota Deployed
Board Plan
Outbound BDR SQL quotas (per month)
7-13 per month
Most XDR teams are measured on the number of SQLs generated. Outbound XDR qualification criteria is focused on finding the right people with a need that aligns to the solution’s value at a company, either in the company’s ICP, or close to it.
11-13 per month
9-11 per month
7-9 per month
<25K ASP
25-75K ASP
>75K ASP
Monthly SQL Quotas
Quota to OTE ratio
5.0x
Best practice quota to compensation ratio is 5x. The ratio can be driven by a variety of factors: territory size, product market fit, average deal size, etc. If you find your ratio is lower, first investigate root causes prior to making any comp/quota changes.
5.0x
5.0x
5.0x
<25K ASP
25-75K ASP
>75K ASP
Total Annual Quota
Total Annual OTE
New as a % of
(New+Expansion)
45-55%
New as a percentage of (new + expansion) provides insight into a SaaS company's ability to attract new customers, diversify its revenue streams, and maintain a healthy balance between growth through existing customers (expansion) and new customer acquisition, all of which are critical for the sustainability and scalability of the business.
55%
45%
45%
<25K ASP
25-75K ASP
>75K ASP
New ARR
(New + Expansion ARR)
Win Rate
30%+
We calculate win rate as the closed won dollars as a percentage of the total closed won and close lost opportunities. The metric can be used to measure sales effectiveness. Win rates have a
direct effect on pipeline coverage. If a company wins a high percentage of opportunities (high win rate) it can achieve targets with a lower pipeline coverage ratio.
30%+
30%+
30%+
<25K ASP
25-75K ASP
>75K ASP
Closed won opportunities ($)
Closed won + closed lost opportunities ($)
YoY ARR Growth
40-50%
YoY ARR Growth is the annual percentage change in ending ARR. Companies with lower ARR tend to have higher ARR growth as they have a lower starting value.
40-50%
40-50%
40-50%
<25K ASP
25-75K ASP
>75K ASP
Ending ARR
-1
Starting ARR
GRR
85-95%+
Gross Revenue Retention indicates if a company has good product-market fit, competitive pricing, and strong customer success.
85-90%
90-95%
95%+
<25K ASP
25-75K ASP
>75K ASP
Starting ARR - Downsell ARR - Churn ARR
Starting ARR
NRR
110-120%+
Net Revenue Retention, which includes expansion, downsell, and churn, indicates how much revenue a company can expect next year from this year’s customer base.
110%
120%+
120%+
<25K ASP
25-75K ASP
>75K ASP
Starting ARR + Expansion ARR - Downsell ARR - Churn ARR
Starting ARR
Gross Sales Efficiency
1X+
Sales Efficiency is a measure of how efficiently dollars spent on sales and marketing translate to new ARR. The metric measures how much ARR is generated for every one dollar spent.
1x+
1x+
1x+
<25K ASP
25-75K ASP
>75K ASP
Current period new ARR
Previous period S&M expense
CAC Payback Months (Rev)
12-18 months
CAC payback period tells you how many months after acquiring a cohort of customers you recoup your upfront investment. Lower ASP companies are likely to have shorter CAC payback periods, because they tend to be hyper focused on fast paced growth. Companies with higher LTV (lifetime value) for customers can support a higher CAC payback period.
12 months
12-15 months
12-18 months
<25K ASP
25-75K ASP
>75K ASP
Previous period S&M expense
Current period new & upsell ARR
X 12
SaaS Quick Ratio
2-4x
The SaaS Quick Ratio measures a company’s ability to overcome churn, aka the “leaky bucket issue.” The optimal ratio of new and upsell to churn and downsell is generally ~4x or higher. Lower ARR companies tend to have higher ratios given they are hyper focused on new sales to capture market share and have a smaller installed customer base (i.e. less opportunity to churn).
2-4x
2-4x
2-4x
<25K ASP
25-75K ASP
>75K ASP
(New + Upsell ARR)
(Churn + Downsell ARR)
Sales Strategy/Reporting
Explore the table by clicking into each metric for how to calculate, targets for each ASP, and a definition of why it’s important