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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

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

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

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

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

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

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

Customer Segmentation analysis will help point out which are your most profitable segments

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

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

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

More Growth Strategy Stats

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

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

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

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews

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

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

Is your SaaS business viable?

56% treat “Existing Customer Renewals” as high priority

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

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions