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 + Software Stats

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

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

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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”

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

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

More Growth Strategy Stats

Very few software companies grow beyond $1 billion in revenues

At Facebook, 15 percent of tech roles are staffed by women

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

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

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

In the early days of a SaaS business, churn really doesn’t matter that much

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

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

The ultimate solution to the churn problem is to get to Negative Churn