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

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

Negative Churn and Expansion Revenue

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

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

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

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

More Growth Strategy Stats

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

80% of venture capital investments take place in the enterprise

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.

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

How to Reduce Churn

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)