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

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

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

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

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

80% of venture capital investments take place in the enterprise

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%

More Growth Strategy Stats

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

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

In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.

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

Three uses for the SaaS Guidelines

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

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

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

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