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

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%.

More SaaS + Software Stats

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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

Companies with longer contracts (2+ years) reported the lowest annual unit churn

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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

56% treat “Existing Customer Renewals” as high priority

More Growth Strategy Stats

54% treat upselling and add-on sales as high priority

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

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

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

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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