Quote Info

There are two other terms which you might see used, which are the counterparts to churn:

  • CRR (Customer Retention Rate) which is equal to 1 – Customer Churn Rate
  • DRR (Dollar Retention Rate) which is equal to 1 – Dollar Churn Rate

So a business that has a negative churn rate, will have a Dollar Retention Rate of greater than 100%. These are some of the very best SaaS business out there. Examples of DRR greater than 100% include: Zendesk: 123%, NewRelic 115%, Box: 130%, Rally Software 127%.

For Entrepreneurs.com

More SaaS + Software Stats

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

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

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

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

More Growth Strategy Stats

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

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

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

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

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

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

September 19, 2019 Seminar

Driving Traffic To Generate Leads: Content Marketing, Paid Ads & SEO

If your business if starving for new leads but struggling with all of the noise, rising costs, and a rapidly changing landscape of the digital marketing world, this seminar will equip you with what you need to gain momentum and leave with an actionable gameplan.


Details + Registration