SaaS conversion benchmarks refer to the average rates at which prospects become paying customers for software as a service (SaaS) companies. Conversion benchmarks are important because they provide an indication of the effectiveness of a company’s marketing and sales efforts, and help to identify areas for improvement.
There are a number of factors that can affect SaaS conversion rates, including the quality of the product, the pricing strategy, the marketing and sales approach, and the target market. Therefore, it is important to understand industry-wide benchmarks in order to assess your own performance and set realistic targets.
The average SaaS conversion rate varies by industry, with some sectors having higher conversion rates than others. According to a study by Totango, the average conversion rate across all industries is around 18%, with the highest rates being in the financial services and healthcare sectors at around 27%. Other sectors such as retail, media and entertainment, and education have lower conversion rates, averaging around 13%.
In addition to industry benchmarks, it is also important to look at benchmarks for different stages of the sales funnel, as the conversion rate can vary significantly at each stage. For example, the average conversion rate for website visitors to sign up for a free trial is around 25%, while the conversion rate from a free trial to a paid subscription is typically around 10-15%.
Here are some examples of SaaS conversion benchmarks based on different stages of the customer journey:
- Website visitors to free trial signups: Conversion rate is around 25%, but varies based on website quality, signup process, and level of interest in the product.
- Free trial to paid subscription: Average conversion rate is 10-15%, influenced by quality of the product, pricing strategy, and effectiveness of the onboarding process.
- Lead to customer: Conversion rate ranges from 2-5%, but is affected by factors such as quality of leads, sales approach, and target market.
- Renewal rates: Average renewal rate is 90%, but can vary based on product quality, customer support, and pricing strategy.
- Upsell/cross-sell rates: Average rate is around 20%, but influenced by relevance of the offer, timing, and level of customer engagement.