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!

sixteenventures.com

More SaaS + Software Stats

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

How to Reduce Churn

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

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

More Growth Strategy Stats

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

Internet Sales strategies have a significantly lower CAC of just $0.42

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

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month