If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

Statistic Info

There’s a lot to pay attention to when measuring the growth trajectory of your SaaS business. Are you increasing LTV while keeping CAC down? Is your customer acquisition rate greater than your customer churn rate? Do you distinguish between monthly recurring revenue and committed monthly recurring revenue?

Answering these questions is no easy task-SaaS metrics are extremely nuanced, and it can be hard to figure out exactly how to get the most complete and realistic understanding of your company’s growth, even if you have a few Harvard MBA’s on hand to model everything out.

More SaaS + Software Stats

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

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

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

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

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

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

How to Reduce Churn

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

Negative Churn and Expansion Revenue

More Growth Strategy Stats

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

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

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

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

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

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

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

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

55% of SaaS companies rate Customer Retention as the key metric to measure

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year