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

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?

SaaS & Tech Growth Strategy Articles

• Sharing Your Vision With Your Customers
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• How to Determine a SaaS Marketing Budget
  Determining a marketing budget for a SaaS or Software company can be a challenging exercise.  Often there is no one right answer for everyone but there are ways to help you attack the problem.Below, read our expanded article and watch our video with Andy Halko as he shares some helpful tips on how to create […]
• Defining Your Brand Voice
  Have you defined your brand voice? Andy shares his thoughts on why it’s important for you to define your brand voice in your marketing.
• SaaS Sales Funnel
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• Social Media Trends for B2B SaaS Brands
  Social Media Trends for B2B SaaS Brands to gain trust, drive trials & demos and speed up the sales cycle.
• The Vision Gap
• 7 Key SaaS Growth Strategies
  Customers aren't just going to appear; marketing teams need to proactively reach them in creative ways. In the current marketing landscape, brands have a near limitless number of ways to reach potential customers.
• Blue Ocean Strategy Developing Value Propositions
• The Importance of a Business Plan
  Before you can begin putting together an effective marketing plan, it’s important to make sure you have a business plan in place. Today Andy talks about understanding the long term and short term goals and objectives of your business, before you start planning your marketing. One of the things I wanted to talk about today […]

SaaS + Software Stats

• Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing
• Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense
• The fastest growing SaaS companies raise an average of $9.5M in Series A funding
• Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem
• The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%
• Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50
• It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue
• Investment in marketing automation tools is expected to reach $25 billion by the year 2023
• How to Reduce Churn

SaaS & Tech Growth Strategy Stats

• Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts
• The average SaaS company spends just 6 hours determining their pricing strategy
• Three uses for the SaaS Guidelines
• In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.
• 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 very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%
• Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers
• In 2017, the world invested around 3.4 billion U.S. dollars in small hydropower technologies, down from 3.9 billion U.S. dollars in 2016.
• 56% treat “Existing Customer Renewals” as high priority