Statistic Info

Monthly vs. Annual Churn Rates

Now, just so we’re on the same page, 5% – 7% Annual churn – the good churn rate – translates to 0.42 – 0.58% monthly churn.

This means companies with acceptable churn only lose about 1 out of every 200 customers (or dollars) per month.

Now that’s a solid platform you can really build a high-growth company on.

On the flip side, a high churn rate is the reason you ended 2012 with a whole bunch of new customers… but had about the same amount of revenue.

Churn is the reason that – though you acquired a lot of new logos in 2012 – you had no significant year over year growth from 2011.

sixteenventures.com

More SaaS + Software Stats

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

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

Three uses for the SaaS Guidelines

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

Is your SaaS business viable?

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

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

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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

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%

More Growth Strategy Stats

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

They may forget what you said, but they will never forget how you made them feel.

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

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

SaaS organizations are now operating in over 100 countries

80% of venture capital investments take place in the enterprise

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years