Statistic Info

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.

Saas Capital

More SaaS + Software Stats

80% of venture capital investments take place in the enterprise

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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

More Growth Strategy Stats

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

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

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

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

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

After $10M in ARR, the median growth rate slows to just under 50%

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

September 19, 2019 Seminar

Driving Traffic To Generate Leads: Content Marketing, Paid Ads & SEO

If your business if starving for new leads but struggling with all of the noise, rising costs, and a rapidly changing landscape of the digital marketing world, this seminar will equip you with what you need to gain momentum and leave with an actionable gameplan.


Details + Registration