Statistic Info

Consistently retaining customers is an important characteristic of any successful SaaS business, and an entire industry, Customer Success, has sprouted up to help SaaS executives do just that. However, knowing what is a “good” retention rate for your individual SaaS company remains difficult to pin down. This research helps answer that question based on our survey of over 700 private SaaS companies.

SaaS customer retention is broken down by:

  • average contract value
  • company size
  • company age

This brief also explores the relationship between growth and retention, the “false positive” retention rates of young SaaS businesses, and the impact of Customer Success programs on overall retention.

Saas Capital

More SaaS + Software Stats

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

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

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

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

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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

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

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

More Growth Strategy Stats

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

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

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

Invention is 10% inspiration and 90% perspiration.

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

Is your SaaS business viable?

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