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

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%.

SaaS & Tech Growth Strategy Articles

• The Importance of a Business Plan
  Before you can begin putting together an effective marketing plan, it’s important to make sure you have a business plan in place. Today Andy talks about understanding the long term and short term goals and objectives of your business, before you start planning your marketing. One of the things I wanted to talk about today […]
• How To Get a Head Start on Marketing Your Product
  When developing a new product or service many people don’t think to begin their marketing ahead of time. Doing this can greatly increase your chances for success. In this insight Andy shares a few ways you can get your product out to your audience before it launches. Did you like this insight? Make sure you […]
• How To Assess Your Brand, Website, Marketing & Competitors
  There are two things required to reach a destination - first to know where you want to go, but second to also know where you stand today.
• Sharing Your Vision With Your Customers
  How can you share your vision with your customers? Andy shares his recommendations on bridging the customer gap.
• Tools For Bridging The Culture Gap
  How can you bridge the culture gap? Andy shares a few examples of tools you can use to help make sure your team is aligned to your vision and working towards the same goal.
• Marketing Strategy vs. Marketing Plan
  So you’ve tried every marketing tip in the book, and you still aren’t seeing results. You’ve started a blog, engaged on social media, made videos, and done everything else you’ve been recommended. Despite your extensive efforts, you haven’t seen any increase in your business. So what’s the problem? The problem probably isn’t what you’re doing, […]
• The Culture Gap
  What is the Culture Gap? Andy explains the idea behind the Culture Gap and what you need to look out for to avoid it.
• Segmentation, Targeting, and Positioning
  If you try to target everyone you end up not reaching anyone.
• Take AIM: How to Target the Right Audience
  Steps needed to establish and reach your target audience.

SaaS + Software Stats

• Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000
• 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
• The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost
• Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues
• 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
• High-growth companies generate 60% fewer sales opportunities than low-growth companies
• A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses
• 55% of SaaS companies rate Customer Retention as the key metric to measure
• Companies with longer contracts (2+ years) reported the lowest annual unit churn

SaaS & Tech Growth Strategy Stats

• Cloud-hosted applications have a 99% uptime
• Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less
• They may forget what you said, but they will never forget how you made them feel.
• Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate
• 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.
• 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
• SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence
• Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense
• Negative Churn and Expansion Revenue