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

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

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

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

80% of venture capital investments take place in the enterprise

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

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

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

More Growth Strategy 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

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

As of December 2018, there were total 105,000 employees in Lockheed Martin, as compared to 126,000 employees in 2015.

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

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

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

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