Statistic Info

An acceptable churn rate is in the 5 – 7% range ANNUALLY, depending upon whether you measure customers or revenue.

And BVP’s assertion is backed up by Pacific Crest in their Private SaaS Company Survey Results that show roughly 70% of SaaS companies in their survey had annual churn in the < 10% range, with 75% of those at 5% or under.

The way I read the results of Pacific Crest’s survey is that 30% of SaaS providers surveyed have an unacceptable level of churn.

Now what about the SaaS providers that aren’t included in surveys like that one or who don’t appear in the logo list of the top investor portfolios and who are just trying to grow? Are they doing better or worse?

sixteenventures.com

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

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

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

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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

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

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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

Three uses for the SaaS Guidelines

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

More Growth Strategy Stats

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

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

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

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%)

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

How to Reduce Churn

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