Growth Strategy

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13 Strategies to Boost SaaS User Retention and Renewals

Article in Growth Strategy

Improving your retention rate can mean the difference between growing your company and running it into the ground. Read specific strategies you can use to improve your SaaS retention rate.

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

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While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

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For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

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As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

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The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

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Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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Growth Strategy

A strategic plan answers questions about who should be on the team, where is the company going, why are we different, how do we close deals, and what does it mean to deliver for clients. See our thoughts on strategic planning.

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13 Strategies to Boost SaaS User Retention and Renewals

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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A strategic plan answers questions about who should be on the team, where is the company going, why are we different, how do we close deals, and what does it mean to deliver for clients. See our thoughts on strategic planning.

Search

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