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

From For
Statistic in SaaS & Tech Growth Strategy

Median annual gross dollar churn (without the benefit of upsells) is ~8%. This result is comparable to past survey results (7% in 2015, 6% in 2014, 8% in 2013).

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn. Companies with shorter contracts (under 2 years) saw increased dollar churn compared to last year; contracts 2 years or longer were relatively consistent with prior survey results.

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Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

56% treat “Existing Customer Renewals” as high priority

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

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

More SaaS & Tech Growth Strategy Stats

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

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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

Three uses for the SaaS Guidelines

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

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%

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%)

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

Invention is 10% inspiration and 90% perspiration.