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This is because they have to invest heavily upfront to acquire the customer, but recover the profits from that investment over a long period of time. The faster the business decides to grow, the worse the losses become. Many investors/board members have a problem understanding this, and want to hit the brakes at precisely the moment when they should be hitting the accelerator.
In many SaaS businesses, this also translates into a cash flow problem, as they may only be able to get the customer to pay them month by month.
For Entrepreneurs.com
More SaaS + Software Stats
Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013
Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000
Growing faster has twice as much impact on share price as improving margins
Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
More than 1/2 of SAAS companies increased their spending on customer retention last year
Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)
More Growth Strategy Stats
A 1% increase in pricing strategy yields an average 11% increase in profit
Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network
Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts
Companies with longer contracts (2+ years) reported the lowest annual unit churn
In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.