Statistic Info

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

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More SaaS + Software Stats

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

Is your SaaS business viable?

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

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

How Often Should The Pricing Committee Be Meeting And Making Changes?

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

How to Reduce Churn

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

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

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

More Growth Strategy Stats

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

After $10M in ARR, the median growth rate slows to just under 50%

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

How To Make Pricing A Constant Process In Your Organization

How Often Should The Pricing Committee Be Meeting And Making Changes?

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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