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

From Saas Capital
Statistic in SaaS & Tech Growth Strategy
Consistently retaining customers is an important characteristic of any successful SaaS business, and an entire industry, Customer Success, has sprouted up to help SaaS executives do just that. However, knowing what is a “good” retention rate for your individual SaaS company remains difficult to pin down. This research helps answer that question based on our survey of over 700 private SaaS companies.

SaaS customer retention is broken down by:

  • average contract value
  • company size
  • company age

This brief also explores the relationship between growth and retention, the “false positive” retention rates of young SaaS businesses, and the impact of Customer Success programs on overall retention.

More SaaS + Software Stats

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

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

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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

Growing faster has twice as much impact on share price as improving margins

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

The best place to hide a dead body is page 2 of Google search results.

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

More SaaS & Tech Growth Strategy Stats

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The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

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High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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