Statistic Info

Executive Summary Summary of the top ?ndings from the latest SaaS Metrics Survey. Customer retention cost, customer health, and customer lifetime value are the new frontier in SaaS metrics 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.

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More SaaS + Software Stats

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

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

Three uses for the SaaS Guidelines

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

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

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

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

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

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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

More Growth Strategy Stats

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

How to Reduce Churn

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

How To Make Pricing A Constant Process In Your Organization

Software and online services are in a period of dizzying growth

Women in western countries use the internet 17 percent more than their male counterparts

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

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