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

From Chaotic Flow
Statistic in SaaS & Tech Growth Strategy

SaaS companies vary a lot in their willingness to invest in customer acquisition. For example, the OPEXEngine SaaS benchmark report gives an average payback period for CAC alone of about 18 months (CAC per new customer divided by average recurring revenue per customer). However, SasS companies with expected growth rates in the 20-50% range had a payback period of only 6.5 months, while those with expected growth rates over 50% had an average payback period of….drum roll….35 months! Ouch. While it makes sense to invest heavily in customer acquisition during high growth, SaaS Metrics Rule of Thumb #6 | Growth Creates Pressure to Reduce Total Cost of Service, highlights the importance of keeping average CAC per customer in check as you grow. Even if you’re angling toward an IPO with a churn rate under 10%, I think it’s near impossible to justify a 3 year payback period just to cover CAC. Talk about negative cash flow!!

More SaaS + Software Stats

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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%

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

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

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

Cloud application services (SaaS) to reach $126 billions by the end of 2021

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

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

More SaaS & Tech Growth Strategy Stats

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

Improve Your Pricing Schedule And Turn More Profit

Investment in marketing automation tools is expected to reach $25 billion by the year 2023

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

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

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

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%

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