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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.

For Entrepreneurs.com

More SaaS + Software Stats

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

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

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

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

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

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

More Growth Strategy Stats

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

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

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

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

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

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.

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.