Statistic Info

Companies that are doing a good job of controlling churn and driving new revenue from existing customers are on the whole growing substantially faster than their peers. Companies still place priority on new customer acquisition Despite a shift in the metrics companies are tracking, priority and funding for customer renewals and upsell has not increased. This suggests that despite best intentions to focus on monetizing existing customers, day-to-day business realities make it di?cult for companies to shift priority and funding. SaaS metrics shifting focus toward existing customers This year more companies than ever are looking at metrics on existing customers such as customer lifetime value, revenue per user, product adoption, and customer health.

Totango

More SaaS + Software Stats

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

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

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

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

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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%)

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

More Growth Strategy Stats

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

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

As of December 2018, there were total 105,000 employees in Lockheed Martin, as compared to 126,000 employees in 2015.

How To Make Pricing A Constant Process In Your Organization

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

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

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

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%

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