The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

Statistic Info

An acceptable churn rate is in the 5 – 7% range ANNUALLY, depending upon whether you measure customers or revenue.

And BVP’s assertion is backed up by Pacific Crest in their Private SaaS Company Survey Results that show roughly 70% of SaaS companies in their survey had annual churn in the < 10% range, with 75% of those at 5% or under.

The way I read the results of Pacific Crest’s survey is that 30% of SaaS providers surveyed have an unacceptable level of churn.

Now what about the SaaS providers that aren’t included in surveys like that one or who don’t appear in the logo list of the top investor portfolios and who are just trying to grow? Are they doing better or worse?

In my experience, it’s quite often worse… and sometimes much worse (as you’ll see in a second).

Honestly, for those companies, it isn’t a lack of customers in the front door that is stopping their growth; it’s the constant flow of customers out the back door that is killing their business!

More SaaS + Software Stats

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

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

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

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

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

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

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

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

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

More than 1/2 of SAAS companies increased their spending on customer retention last year