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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

SaaS IPOs have more than doubled over the last 12 years

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

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

Growing faster has twice as much impact on share price as improving margins

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

26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

More Growth Strategy Stats

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

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

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

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

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

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

In 2017, the world invested around 3.4 billion U.S. dollars in small hydropower technologies, down from 3.9 billion U.S. dollars in 2016.

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

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