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?

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More SaaS + Software Stats

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

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

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

Software and online services are in a period of dizzying growth

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

More Growth Strategy Stats

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

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