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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 SaaS + Software Stats

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

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

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

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

More Growth Strategy Stats

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

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

Negative Churn and Expansion Revenue

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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

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

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews