36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

Quote Info

32% of respondents experienced an annual churn rate of 5% or less, while almost one-fifth had churn exceeding 15%. Survey responses suggest mixed results in controlling churn. While slightly over one-third report a decrease in churn over last year, 30% of respondents saw an increase in churn and the balance 34% saw no significant change. Annualized Revenue Churn Rate 0-5% churn 5-10% churn 10-15% churn

More Tech Services Stats

Agile projects are twice as likely to succeed as projects run with traditional project management

A 1% increase in pricing strategy yields an average 11% increase in profit

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

Negative Churn and Expansion Revenue

Software and online services are in a period of dizzying growth

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

56% treat “Existing Customer Renewals” as high priority

55% of SaaS companies rate Customer Retention as the key metric to measure

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

More Growth Strategy Stats

General Dynamics is a market leader in the aerospace and defense industry. In 2018, a total of 105,600 people were working at General Dynamics.

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

Negative Churn and Expansion Revenue

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

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

How Often Should The Pricing Committee Be Meeting And Making Changes?

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months