Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

SaaS + Software
Statistic in Growth Strategy

Statistic Info

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

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

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

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

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely 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 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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

Three uses for the SaaS Guidelines

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

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

More Growth Strategy Stats

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

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

73% of organizations indicated nearly all their apps will be SaaS by 2021

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

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

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

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

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