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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The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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

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

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

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

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54% treat upselling and add-on sales as high priority

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

Growing faster has twice as much impact on share price as improving margins

The median annual unit churn for SAAS companies was 10% in 2016

More Growth Strategy Stats

Negative Churn and Expansion Revenue

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

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

80% of venture capital investments take place in the enterprise

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

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

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

Internet Sales strategies have a significantly lower CAC of just $0.42