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Account Churn is very important because it gives a very clear percentage of the customers that are leaving you. It takes away the bias from larger accounts so that you aren’t left with one large customer paying for all of your revenue – which is a dangerous situation to be in

InsightSquared

More SaaS + Software Stats

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

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%

Is your SaaS business viable?

Software and online services are in a period of dizzying growth

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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%

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

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

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

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

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

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

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

The median annual unit churn for SAAS companies was 10% in 2016

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

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