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

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

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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

Companies with longer contracts (2+ years) reported the lowest annual unit churn

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

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

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

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

More Growth Strategy Stats

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

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

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

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

Analysed 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

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

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

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