Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

Quote Info

Companies typically track three churn metrics: customer churn, gross-revenue churn, and net-revenue churn. The most comprehensive of these three metrics is net-revenue churn, as it captures both the dollar value lost from churning customers and the dollar value gained from expansion revenue (which comes from both up-selling and cross-selling to existing customers). Our analysis showed several results:

• Across all three customer types, companies in the top quartile of growth maintained lower net-revenue churn than mean performers.
• The net-revenue performance of the top-quartile-growth performers was driven most significantly by advantages in gross-revenue churn as opposed to logo churn or revenue expansion (upsell/cross sell) within existing accounts.
• Companies that excel at lowering gross-revenue churn emphasize several key customer-success best practices throughout their organizations.

More SaaS + Software Stats

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

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

The average 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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

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

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

More Growth Strategy Stats

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

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

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

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

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%

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

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

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

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