Statistic Info

By definition, non-renewal rates are higher than gross dollar churn rates. However, it is interesting to see that the non-renewal rates are also higher for shorter duration contracts.

For Entrepreneurs.com

More SaaS + Software Stats

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

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

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

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

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

How to Reduce Churn

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

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

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

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

More Growth Strategy Stats

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

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

Negative Churn and Expansion Revenue

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

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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

55% of SaaS companies rate Customer Retention as the key metric to measure

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

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%)

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