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The results of our analysis show that top-quartile-growth performers have much lower net-revenue churn than mean performers. The analysis also shows that 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 (Exhibit 1). In particular, between the SMB and the SMBs-and-enterprises customer types, top-quartile performers not only have net-revenue churn that is 14 to 23 percentage points less than mean performers but also have net-revenue churn that is negative in an absolute sense. Negative net-revenue churn means that these top-quartile performers would continue to grow even if they did not acquire any new customers (their ACV expansion in existing accounts is greater than any revenue churn from existing customers).

Mckinsey

More SaaS + Software Stats

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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

Improve Your Pricing Schedule And Turn More Profit

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

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

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

The global cloud computing market size is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

More Growth Strategy Stats

In 2018, the revenue of General Dynamics amounted to nearly 36.2 billion U.S. dollars.

Invention is 10% inspiration and 90% perspiration.

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

How to Reduce Churn

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

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

47% of millennials want to work at diverse companies, according to a recent study.

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