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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

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

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

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

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

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

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.

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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

More Growth Strategy Stats

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

Negative Churn and Expansion Revenue

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

A 1% increase in pricing strategy yields an average 11% increase in profit

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

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%

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

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