Fewer sales making you more money?

That’s one of the rather surprising results of an InsightSquared study of hundreds of software-as-a-service startups. InsightSquared is a business analytics solution for Salesforce, which gives it some very interesting insight into what works — and what doesn’t — for SaaS companies.

SaaS economics, of course, are different from traditional sell-something-once-and-collect-the-cash companies. ARR, or annual recurring revenue, is the key metric, not sales, and that changes everything.

InsightSquared’s data indicates that higher-growth SaaS companies make fewer sales than slower-growing competitors. The reason is that they focus on higher-value deals — 2.8X the size, on average. Those deals take longer to consummate, but they return 170 percent of the effort and resources that goes into them.

Interestingly, the data also shows that top reps at SaaS companies don’t necessarily have better win rates — they just work more opportunities than average reps.

Here’s all the data, in visual form:


More information:

Salesforce, the Customer Success Platform and world's #1 CRM, empowers companies to connect with their customers in a whole new way. The company’s platform and application services include: Salesforce Sales Cloud, the world's #1 sale... read more »

InsightSquared is data intelligence for small and medium businesses. For decades big businesses have depended on Business Intelligence (BI) systems. Big businesses need BI to analyze historic revenue and profitability, forecast upcomin... read more »

Box was founded on a simple, powerful idea: it should be easy for people to access, collaborate, and share all their content, wherever they are. Co-founders Aaron Levie and Dylan Smith, along with our fast-growing team, have since esta... read more »

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