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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%.

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More SaaS + Software Stats

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

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%

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

More Growth Strategy Stats

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 global cloud computing market size is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025

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

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

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

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

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

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue