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

Statistic Info

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

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

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

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

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

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

56% treat “Existing Customer Renewals” as high priority

Software and online services are in a period of dizzying growth

More Growth Strategy Stats

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

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

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

High-growth companies generate 60% fewer sales opportunities than low-growth companies

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

How To Make Pricing A Constant Process In Your Organization