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

Software and online services are in a period of dizzying growth

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

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

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

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

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

54% treat upselling and add-on sales as high priority

More Growth Strategy Stats

At Twitter, 10 percent of tech roles are staffed by women

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

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

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

Negative Churn and Expansion Revenue

Women in western countries use the internet 17 percent more than their male counterparts

The average SaaS company spends just 6 hours determining their pricing strategy

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

55% of SaaS companies rate Customer Retention as the key metric to measure

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month