The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

Statistic Info

To study churn, we need to look at a particular group of customers that signed up in a particular time period. We refer to these groups as cohorts. So you might have a Jan 2014 cohort which is comprised of all the customers that signed up in Jan 2014. We will then want to track how many customers we retain, and how the revenue for each cohort evolves over time. Here is a graph that shows what happens to the number of customers in a particular cohort over several years with three different monthly Customer Churn Rates.

More SaaS & Tech Growth Strategy Stats

Is your SaaS business viable?

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

47% of millennials want to work at diverse companies, according to a recent study.

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

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

How To Make Pricing A Constant Process In Your Organization

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

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