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Companies that are doing a good job of controlling churn and driving new revenue from existing customers are on the whole growing substantially faster than their peers. Companies still place priority on new customer acquisition Despite a shift in the metrics companies are tracking, priority and funding for customer renewals and upsell has not increased. This suggests that despite best intentions to focus on monetizing existing customers, day-to-day business realities make it di?cult for companies to shift priority and funding. SaaS metrics shifting focus toward existing customers This year more companies than ever are looking at metrics on existing customers such as customer lifetime value, revenue per user, product adoption, and customer health.

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More SaaS + Software Stats

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

How to Reduce Churn

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

SaaS organizations are now operating in over 100 countries

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

More Growth Strategy Stats

Customer Segmentation analysis will help point out which are your most profitable segments

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

The average SaaS company spends just 6 hours determining their pricing strategy

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

Internet Sales strategies have a significantly lower CAC of just $0.42

Invention is 10% inspiration and 90% perspiration.

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

SaaS IPOs have more than doubled over the last 12 years

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

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