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

From InsightSquared
Statistic in SaaS & Tech Growth Strategy

We wanted to find out, so as part of our 2016 Sales Benchmarking Report, we took a close look at the Quick Ratios of the high-growth SaaS companies in our study. We sliced the data in every conceivable way to see what we could uncover about the optimal Quick Ratio for growing SaaS companies, and how the SaaS Quick Ratio evolves as companies grow.

More SaaS + Software Stats

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

SaaS IPOs have more than doubled over the last 12 years

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

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

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SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

More SaaS & Tech Growth Strategy Stats

Invention is 10% inspiration and 90% perspiration.

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

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

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.

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

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

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

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

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

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.