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

SaaS + Software
Statistic in SaaS & Tech Growth Strategy

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

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

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

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

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

Software and online services are in a period of dizzying growth

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

56% treat “Existing Customer Renewals” 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

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

More SaaS & Tech Growth Strategy Stats

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

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

Is your SaaS business viable?

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

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

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

The median annual unit churn for SAAS companies was 10% in 2016

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