SaaStr

OCTOBER 28, 2021

The thesis was many metrics were too easy to game. And your job as a founder is to move a subset to high-value users. #2. Phil sees most startups pushing too hard on growth too early. At Evernote, they conflated bounce with churn — and Phil challenges us not to. For example, there are always 7.8

Churn 188

Churn Retention Acquisition Startup 188

SaaStr

JUNE 28, 2021

Their burn rate sneaks up on them, and becomes a bit out of control — without feeling like it. And the net burn rate starts off pretty low — also at $100k a month. It’s just, to invest in sales and marketing now, and make those extra hires, the burn rate is growing even faster at 12% a month after $100k MRR.

Sales Hiring 310

Sales Hiring Scale Payment Features Finance 310

SaaStr

SEPTEMBER 3, 2023

The magic of a SaaS model is: Very high logo retention. High gross margins. How SaaS Is Fairing in the Macro Economy It’s crazy how much more efficient the leaders in SaaS and Cloud have gotten in one year. How did they do that? Let’s dive right in. But that wasn’t always the case. It took a while.

Sales Hiring 219

Sales Hiring Headcount Finance Technical Review 219

SaaStr

MAY 19, 2023

We’re coming off a stretch in 2021 where VC capital hit crazy, record highs… and now is coming into multi-year lows. It’s a time when SaaS and Cloud spend are also at record highs , and many Cloud leaders are still growing at strong rates … yet many startups have stopped growing at all. And really worst of all is multiples.

New CTO 240

New CTO CTO Banking Cloud 240

SaaStr

SEPTEMBER 9, 2022

Everything just diverged from economics that really made sense: Fintech companies and pseudo SaaS companies with low gross margins stiill had to pay the same or similar commissions as high margin SaaS companies to stay competitive. Sales reps in low NRR and high churn environments got paid almost the same as enterprise reps.

Scale 303

Scale Venture Capital Sales Hiring Sales 303

SaaStr

MAY 22, 2023

The best of us kept growing , albeit with elevated churn through 2010: What Really Happened to SaaS in the ’08-’09 Recession And to those of us who have been doing SaaS a long time … 2023 just feels Like it Used to Be. The biggest issue though is how long it just got easier and easier. Sales is hard again.

SaaS 236

SaaS Churn Sales Software 236

SaaStr

FEBRUARY 8, 2021

Some thoughts on things you don’t really get until about $8m-$10m ARR or so: Churn Lurks. Churn doesn’t happen overnight, especially with annual contracts. Too many customers, too many workflows, too many marketing programs, too many salespeople. Competition is The Root of All High Burn Rates.

Scaling 241

Scaling SaaS Churn Metrics 241

SaaStr

FEBRUARY 9, 2024

You have to figure out how to prioritize against these categories and use the three areas above to help scale your go-to-market team. There are usually too many CSMs and not enough implementation hires. In a product-led growth strategy, the product serves as the focal point of your company’s marketing and strategies.

Scale 252

Scale Sales Hiring Sales Marketing 252

SaaStr

APRIL 2, 2023

They are humans too. Mistake: Not scaling based upon leading indicators We’ve had 3 periods in history where we scaled up way too fast: Early on, when we thought the enterprise opportunity for Gainsight’s Customer Success product was huge after closing *1* enterprise deal! Here are my 10 greatest (worst?) We should give them a chance.

Sales Hiring 255

Sales Hiring Scale Scaling Customer Success 255

SaaStr

JANUARY 17, 2021

In practice, high churn is the only thing. But what’s going to stop company X from continuing to grow at outlier rates? Importantly, they buy more stuff from you, too. In theory, many things can kill a SaaS startup after $4m-$5m ARR. In practice, quitting is the only thing. It’s not that hard. More seats.

SaaS 363

SaaS Venture Capital Churn Branding 363

SaaStr

DECEMBER 29, 2022

The Best in SaaS are still growing at incredible rates, but the overhang from the crazy multiples and VC funding run of late 2020-early 2022 will hang over our heads for the rest of the year. Make Absolutely Sure Your Burn Rate is Under Control. And the #1 issue I see is founders almost getting the burn rate under control.

Sales Hiring 223

Sales Hiring Venture Capital Healthcare Communication 223

SaaStr

JULY 5, 2023

While MongoDB overall has grown at epic rates, it hasn’t been immune from folks being more careful on how much compute they use. I like this chart a lot showing both the awesome power of high NRR, and also how you have to invest in customers that scale with you over time. You can grow into them, too.

Scale 174

Scale cloud efficiency Cloud Business Model 174

SaaStr

JANUARY 5, 2022

How did they turn their growth rates around? The product roadmap aligned with this messaging, too. Those customers will always renew at higher rates because they can see what the partnership brings to them. Especially with the coronavirus pandemic, Box—like many other SaaS companies—saw a decline in growth year over year.

Scale 253

Scale Scaling Sales Hiring Software Review 253

SaaStr

APRIL 28, 2022

Our second SaaS blog post ever, in 2012 (updated after) was “Want to Understand SaaS? High NRR is the key to the magic in SaaS. And high NRR is a gift. And high NRR is a gift. They often have very low show rates at their QBRs. Ok this many seem like an odd post on SaaStr. I’m no longer so sure.

Customer Success 200

Customer Success Metrics Scale Retention 200

SaaStr

APRIL 4, 2023

Managing Partner of CIPIO Partners, Rolan Dennert, shares how companies need to readjust and rethink GTM fit — and even product market fit — from time to time. This involves high-touch sales with an experienced and large sales department. If churn doesn’t grow, your lifetime customer value is at its peak.

Scale 220

Scale Strategy Scaling Outbound Sales Team 220

SaaStr

JUNE 22, 2021

Q: What is the better SaaS sales compensation plan: paying reps the 12 months up front for the contract value or paying them pro-rated 12 monthly payments? Because while it does sort of align interests, run the math … and you’ll see, it’s too hard for them to make any real money this way. That will work well, too.

SaaS Payments 169

SaaS Payments Compensation Payment Services Sales 169

User Pilot

JULY 13, 2023

Are you trying to find out how to measure growth of a company? Measuring a company’s growth helps you understand how much you progressed and where you stand. In this article, we’ll go through how to measure growth of a company by delving deep into the basics, relevant metrics, and each necessary company growth rate formula.

Metrics 93

Metrics Customer Lifetime Value Benchmarks Churn 93

User Pilot

NOVEMBER 28, 2022

Churn is the enemy of product growth. A churned user means lost future revenue and a waste of the resources it took to acquire them. How do you lower your churn rate and make sure all your users stick around? In this article, we’ll show you: What customer churn is and why it matters.

Churn 95

Churn Software Review SaaS User Experience 95

SaaStr

AUGUST 7, 2023

How Is CAC Calculated In SaaS? CAC stands for Customer Acquisition Costs and measures how much it costs to buy a new customer. Lemkin and the Monday team share how this manufactured metric doesn’t determine cash flow and what metrics you can use instead. For a quick recap on SaaS metrics: What is ARR in SaaS?

Metrics 184

Metrics SaaS Sales Hiring Finance 184

SaaStr

JANUARY 5, 2021

Based just on the velocity rate from the past X months. But let me tell you, if your ACV is high enough, outbound can work. Your churn may be low. Your churn will go down, and your upsells will go up. I agree with most Start-Up Truisms. One of the best ones is Don’t Chase the Shiny Penny. It’s hard, yes.

Sales Hiring 323

Sales Hiring SaaS Outbound Sales Team Customer Success 323

SaaStr

DECEMBER 29, 2019

Some take-aways: If You Truly Have Net Negative Churn and High NPS — Then Almost Any Reasonable CAC Makes Sense. But you have to have insane NPS/CSAT + truly high net negative churn (120%-140%) for this math to really work. Put Lots of Coverage on Lost Deals, Too. If It Lets Acquire 10+ Year Customers.

Scale 345

Scale Churn Construction SMB 345

SaaStr

JANUARY 24, 2022

In the old days, we didn’t have to worry about finance too much. But it was on the margin — the ACVs were low, and the CAC was high. It was too big a flag for a company at the edge of where I like to invest. Take a read if you are still running finance yourself, or just have an part-time outsourced resource.

Finance 323

Finance Outsourcing Services Systems Review Technical Review 323

User Pilot

APRIL 11, 2023

Understanding the average customer retention rate for your industry is critical to determining the health of your business. It tells you whether your customer retention rate is too low or just good enough. However, the average customer retention rate by industry varies wildly. Book a demo to learn how it works.

Retention 97

Retention Automotive SaaS Customer Lifetime Value 97

User Pilot

MAY 5, 2022

Churn analytics helps you detect your product friction points and understand why users stop using the tool. This is crucial if you want to know how healthy your SaaS product is and what should be improved to increase customer retention and lower the churn rate. A churn rate over 10 % indicates trouble.

Churn 98

Churn Retention Subscription Payment Features 98

User Pilot

JULY 20, 2023

Wondering how to reduce customer churn rate for your business? In this article, we review different ways to identify potential churn and deal with it. Attrition is the bane of every subscription business; low retention rates will result in a duce and the customer lifetime value and revenue will plummet.

Churn 89

Churn SaaS Payments Payment Solutions Payments 89

SaaStr

MARCH 7, 2023

Many companies got sucked into the 2021 vortex of a low-interest rate environment and high multiples when they should have focused on growth and efficiency. As software lovers, this one can hurt, but it makes sense when spending too much on nice-to-have tools vs. the must-haves. PST, to unveil the data behind effective scaling.

Outsourcing Services 164

Outsourcing Services Scaling Venture Capital Forecasting 164

SaaStr

FEBRUARY 18, 2021

Assume a 2% conversion rate, for simplicity’s sake. Enough not to churn. But there are not too many with 1,000,000 paid business customers, or 50m truly active users. 50m might be too high for some. Maybe your conversion rate will be higher. Maybe your conversion rate will be higher.

Business Model 281

Business Model Scale Business PayPal 281

SaaStr

OCTOBER 17, 2023

As important as it is to see what numbers are happening, it’s worth thinking about what’s happening organizationally, too. During this time, you might also see: Mis-hires Poor fit customers More demanding customers All those new hires are going on a journey to find their own version of product market fit — learning how to sell this product.

Scale 164

Scale Sales Hiring Customer Success Scaling 164

Subscription Flow

DECEMBER 27, 2023

Let us dig straight into the meat of this blog: customer renewal rate is way of determining the imprint of customers who renew their subscriptions to your product or service. What Is Customer Renewal Rate? And poor renewal rates are the result of a variety of issues, ranging from poor pricing strategy to poor user experience.

SaaS 64

SaaS Subscription Payment Features Forecasting 64

SaaStr

NOVEMBER 23, 2020

A long-time reader wrote in to ask a question that pretty much everyone asks some variant of: If you had to force rank these items in terms of what we should primarily be looking for in these first sales reps, how would you rank them? – has sold something of a similar size ticket/ACV (ours is high.$150k-350k Some are too slick.

Sales Hiring 341

Sales Hiring Sales SaaS Churn 341

SaaStr

JANUARY 12, 2024

We just wrote up how some of the biggest changes of SaaS are now coming, specifically in Customer Success and Sales. Now, in 2024, we’re in the age of efficiencies, and we’re rethinking whether we should put more people on it or tolerate more churn and issues because we want to be cash flow positive. Let’s dive in.

Sales Hiring 239

Sales Hiring Customer Success Scale AI 239

SaaStr

SEPTEMBER 24, 2020

You know how everyone says you'll never look and wish you'd kept a bad VP as long as you did? A lot of classic SaaStr advice has been how to spot the best potential VPs. A lot of classic SaaStr advice has been how to spot the best potential VPs. How to interview them and qualify them. Close rates go down.

Sales Hiring 211

Sales Hiring Part-Time VPE Scale Underperforming Technical Team 211

User Pilot

OCTOBER 31, 2023

Wondering how to increase free trial conversion for your software product? But with the right conversion rate, you’ll unlock growth opportunities and become more competitive. There’s no universally defined “good” conversion rate for free trials. Trials can be tricky. There’s also the cost implication.

SaaS Payments 86

SaaS Payments Payment Methods Strategy Payment Solutions 86

SaaStr

APRIL 1, 2022

Schuck bootstrapped the business and did not bring in outside capital until seven years down the line at a $25 million ARR run rate, and they were profitable. ZoomInfo, formerly DicoverOrg, has historically been a high-margin business, but they were hesitant to invest more in growth avenues since they had a well-oiled machine.

Sales Hiring 220

Sales Hiring Acquisition Investment Leadership 220

User Pilot

JANUARY 31, 2023

How to prevent churn by identifying at-risk customers? In SaaS, you can grow your revenue only if your churn rate is low, so retaining at-risk customers is crucial. In this article, we will discuss the ins and outs of at-risk customers, how to detect them, and five actionable strategies to help you prevent churn.

Churn 97

Churn Underperforming Technical Team SaaS Payments Payment Solutions 97

User Pilot

DECEMBER 12, 2022

With ease, you’ll gather, analyze, and share user engagement insights that will reduce churn and drive product growth. Read on to learn how to choose the right engagement metrics for your dashboard and how to build one code-free. Having one will enable your team to collaborate more effectively.

Engagement 93

Engagement Metrics Scale Customer Lifetime Value 93

ChurnZero

DECEMBER 27, 2019

Along with one too many holiday parties, the year’s end brings reflections and roundups of the most popular trends from the past 365 days. I f ChurnZero were to release a greatest hits compilation of our top content, milestones, and life events in 2019, this blog post would be it. Top 10 Blog Posts from 2019 . You’re not alone.

Technical Review 64

Technical Review Software Review Churn Customer Success 64