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.
Mckinsey

More SaaS + Software Stats

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

Is your SaaS business viable?

80% of venture capital investments take place in the enterprise

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

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

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

More Growth Strategy Stats

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

In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.

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

SaaS IPOs have more than doubled over the last 12 years

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

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