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The phenomenon of longer contract terms for larger contracts is pretty clear. Companies in the “elephant hunter” group are less aggressively booking super long-term contracts. Respondents with >$250K median ACV book nearly 25% of their contracts at 3 years or longer (down from 35% in the 2015 group).

For Entrepreneurs.com

More SaaS + Software Stats

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

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

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

How to Reduce Churn

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

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

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

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

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

More Growth Strategy Stats

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

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

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

A 1% increase in pricing strategy yields an average 11% increase in profit

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

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