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As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn. Companies with shorter contracts (under 2 years) saw increased dollar churn compared to last year; contracts 2 years or longer were relatively consistent with prior survey results.

By definition, non-renewal rates are higher than gross dollar churn rates. However, it is interesting to see that the non-renewal rates are also higher for shorter duration contracts.

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

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

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

Customer Segmentation analysis will help point out which are your most profitable segments

Three uses for the SaaS Guidelines

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

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

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

They may forget what you said, but they will never forget how you made them feel.

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

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

After $10M in ARR, the median growth rate slows to just under 50%

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

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

Is your SaaS business viable?

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

General Dynamics is a market leader in the aerospace and defense industry. In 2018, a total of 105,600 people were working at General Dynamics.