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

SaaS + Software
Statistic in Growth Strategy

Statistic Info

The SaaS industry continues to be a challenged by high churn rates Spending on customer retention is growing SaaS companies continue to invest in tracking more metrics on their existing customers. The top new metrics companies plan to track in 2016 are customer retention cost, customer health, and customer lifetime value. More than two-thirds of the surveyed SaaS companies experienced annual churn rates of 5% or higher. Additionally, almost the same number saw an increase or no change in churn since the previous year. More than half of the companies surveyed increased their spending on customer retention last year. Spending on sta?ng increased at a faster clip compared to spending on technology or programs, suggesting that companies are still more focused on building out their teams vs. putting in place the infrastructure to scale customer retention operations. Upsell and expansion sales are a missed opportunity for SaaS vendors For the large majority of SaaS companies surveyed (81%), only 20% or less of new revenue came from existing customers in the form of upsell and expansion sales. SaaS company growth rates are strongly in?uenced by customer retention and upsell For the third year in a row, the survey indicates that the fastest growing SaaS companies have a signi?cantly better record on churn and upsell, underscoring the critical role of managing revenue from existing customers in the SaaS business model.

Totango

More SaaS + Software Stats

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

More than 1/2 of SAAS companies increased their spending on customer retention last year

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

More Growth Strategy Stats

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

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

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

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

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

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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)

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