SaaStr

AUGUST 25, 2020

Q: What is more important, getting new customers or customer retention? It’s a trick question, of course — the crazy high net negative churn of top SaaS companies means that of course retention matters more than new customers. With 139% Net Retention Rate. More on that here. But ultimately, things change.

Retention 281

Retention Scaling Churn Engineering 281

SaaStr

MARCH 20, 2024

At SaaStr Miami, former Founder’s Fund Partner and CRO of Brex Sam Blond — host of the SaaStr CRO Confidential Podcast — sat down with SaaStr CEO and founder Jason Lemkin for a fireside chat about finding success as a SaaS company in 2024. What he’s learned on both sides of the VC table is that the bar is really high for most VCs.

Sales Hiring 245

Sales Hiring Sales Recruiting Scale Headcount 245

Clouded Judgement

DECEMBER 21, 2023

My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback). ” 3 months later, what happened to those green shoots? ” 3 months later, what happened to those green shoots? last quarter to 1.6%

Cloud 177

Cloud Software Benchmarks Retention 177

SaaStr

NOVEMBER 27, 2021

If this is your first SaaS company, you may not have ever hired or built a Customer Success team. So let’s talk more about this uber-critical position, what it is, when to hire for it, and what to expect and measure. Is your CS team growing as fast as your sales team? If not, are you sure your have this right?

Sales Hiring 244

Sales Hiring Customer Success Scale Customer Lifetime Value 244

SaaStr

JUNE 11, 2020

Q: What is customer lifetime value, and why is it important? CLTV is critical (of course), but it has become less useful as a planning tool over time in SaaS. In the early days of SaaS, we all focused on Customer Lifetime Value. In B2C and high-churn environments, it’s indeed a critical metric. It might justify it.

Metrics 197

Metrics Customer Lifetime Value B2C B2B 197

SaaStr

MAY 11, 2021

There are two things I see SaaS entrepreneurs who are post-Traction and post-Scale say again and again: We’re So Sticky. Our Churn is Basically Zero in the Enterprise. It’s a term well known to Net Promoter Score advocates. You know what happens? Once we’re in, it’s so hard to rip us out.

B2C 264

B2C Churn Enterprise Revenue 264

SaaStr

JUNE 17, 2022

The reality is though, in SaaS, especially if you are primarily sales-driven, that’s often gonna be tough. So if you’re building a model for your SaaS start-up, or thinking about cash-flow positive as a goal, let me offer a few learnings about how we got there faster: Land A Few Whales. Big Customers) in SaaS.

SaaS Payments 261

SaaS Payments Sales Hiring SaaS Payment Services 261

SaaStr

DECEMBER 29, 2019

Salesforce likes to talk about “Customers for Life”, and while that’s sort of catchy, it’s a little hard to grok what it really means. Some take-aways: If You Truly Have Net Negative Churn and High NPS — Then Almost Any Reasonable CAC Makes Sense. If It Lets Acquire 10+ Year Customers.

Scale 344

Scale Churn Construction SMB 344

Clouded Judgement

JUNE 20, 2023

My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback). But what we’re really looking for is budgets expanding, shortening sales cycles, less pressure on expansion, etc.

Cloud 161

Cloud Software Benchmarks Scale 161

Clouded Judgement

SEPTEMBER 12, 2023

My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback). When I line up all the companies I analyze in this article by net new ARR added in a quartery, you can see how bad Q1 was.

Cloud 169

Cloud Software Benchmarks Retention 169

SaaStr

AUGUST 12, 2020

Q: What are the typical discounts SaaS companies offer for a multi-year contract paid upfront for a 2, 3 & 5 year contract? You need to back into what you are solving for: Is your churn material? If it’s close to zero by logo, and negative based on cohort revenue (i.e. Five is a stretch.).

Churn 173

Churn Revenue SaaS Sales 173

SaaStr

NOVEMBER 27, 2021

If this is your first SaaS company, you may not have ever hired or built a Customer Success team. So let’s talk more about this uber-critical position, what it is, when to hire for it, and what to expect and measure. Is your CS team growing as fast as your sales team? If not, are you sure your have this right?

Sales Hiring 187

Sales Hiring Customer Success Scale Customer Lifetime Value 187

SaaStr

DECEMBER 19, 2019

We kicked off our 5 Interesting Learnings series with “newer” SaaS companies for the most part, and learnings as they IPO’d: 5 Interesting Learnings from PagerDuty, as It IPOs. If you have something great in SaaS, never sell ??. If you have something great in SaaS, never sell ??. As it IPOs. With a $10k ACV.

Outsourcing Services 312

Outsourcing Services Scale SMB Pricing 312

SaaStr

JANUARY 17, 2021

In theory, many things can kill a SaaS startup after $4m-$5m ARR. In theory, many things can stop a SaaS startup after $4m-$5m ARR from getting to $100m. In practice, high churn is the only thing. But what’s going to stop company X from continuing to grow at outlier rates? In practice, quitting is the only thing.

SaaS 363

SaaS Venture Capital Churn Branding 363

SaaStr

AUGUST 1, 2019

In SaaS, they all have top-tier net revenue retention. Even, and even especially, if their customers are SMBs (which churn at a higher rate): PagerDuty, 139% net revenue retention. Slack , 143% net revenue retention. Zoom , 140% net revenue retention. Fastly , 130% net revenue retention. As It IPOs.

Retention 168

Retention Churn Revenue SaaS 168

Clouded Judgement

APRIL 12, 2023

My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback). Q4 earnings season for cloud businesses is now behind us. Subscribe now When Will Macro Improve? You can see this in the two charts below.

Cloud 161

Cloud Software Benchmarks Retention 161

Clouded Judgement

DECEMBER 23, 2022

Here are the four data points: Net New ARR: Net new ARR added in a quarter represents new customer ARR + expansion ARR - churn / contraction ARR. For software businesses, generally the sales capacity goes up every quarter (as you ramp more reps), so you want the net new ARR added every quarter to go up.

Cloud 130

Cloud Sales Hiring Trends Subscription 130

Chart Mogul

JULY 6, 2023

Churn, SaaS companies should avoid it like the plague. But is the term churn always bad? Say hello to negative churn, churn’s much more friendly sister metric. You won’t avoid negative churn, in fact, you should do everything in your power to achieve it. But is the term churn always bad?

Benchmarks 52

Benchmarks Churn SaaS Customer Lifetime Value 52

User Pilot

APRIL 19, 2024

That’s where Net Promoter Score (NPS) comes into play. Dive into the Net Promoter Score definition to discover mirror customer sentiment and how it can help redefine your business strategy. Net Promoter Score surveys help shine a light on what’s working well and potential improvements.

Scale 52

Scale Systems Review Software Review Branding 52

SaaStr

APRIL 30, 2021

Lately at SaaStr, we’ve become more and more buyers of SaaS software ourselves. And it’s been a vivid reminder of what I hate so much about buying software: Vendors selling you software you never use or deploy. So what’s the right answer? Second, SaaS buyers are all veterans now. The list goes on.

SaaS 264

SaaS Pricing Software Churn 264

SaaStr

DECEMBER 30, 2020

You need to, to scale in SaaS. We’ve all learned this over the past decade in SaaS: You want qualifiers qualifying — BDRs. It’s much, much more efficient for skilled professionals to only be doing what they are best at. And more folks on the success and renewals team with higher net negative churn.

Scale 228

Scale Sales Hiring Sales Scaling 228

SaaStr

DECEMBER 14, 2020

So as you’ve seen, acquisitions have picked up in SaaS. So many acquisitions, so many IPOs, so many public and private valuations of great SaaS companies are actually at / worth less than 10x ARR. So if you go out looking for 20x, 30x, 100x ARR … understand that’s what you are signing up for.

SaaS 335

SaaS Acquisition Cloud Finance 335

User Pilot

MARCH 25, 2024

Whether you’re planning your exit, seeking VC funding, or setting up ESOPs, a SaaS valuation is a must. Our article: Explains different SaaS valuation methods. Shows how to leverage PLG strategies to boost the value of your SaaS business. Want to learn how Userpilot can help you improve your SaaS valuation?

SaaS 102

SaaS Customer Lifetime Value Acquisition Metrics 102

Baremetrics

NOVEMBER 11, 2020

Generally speaking, you don’t want your SaaS metrics to be negative. Negative daily active users? Negative revenue? Negative net revenue churn? Net revenue churn is the exception to the rule, and it’s one of the few times you’ll hear founders get excited about a KPI being in the negative.

Churn 111

Churn Payments Social Media SaaS Payments 111

Clouded Judgement

DECEMBER 20, 2022

My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback). So what are these consensus estimates and who creates them? Q3 earnings season for cloud businesses is now behind us. Let’s dive in.

Cloud 130

Cloud Software Review Software Benchmarks 130

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. Let’s get started.

Churn 97

Churn Software Review SaaS User Experience 97

SaaStr

APRIL 10, 2020

Hopefully, you are one of the 15% or so of SaaS companies getting a boost from these crazy times. Make sure net negative churn is at least covered and invested in. Make sure net negative churn is at least covered and invested in. (Note: I wrote a version of this in 2017 when times were good.

Sales Hiring 311

Sales Hiring Startup Investment Revenue 311

Baremetrics

OCTOBER 21, 2020

Revenue churn answers the question: how much MRR did we lose last month? Your answer says a lot about the long term health of your company as a SaaS or subscription business. The SaaS business model is built on the concept of retaining as much of your monthly recurring revenue (MRR) as possible. Try Baremetrics Free.

Churn 118

Churn Revenue Benchmarks Pricing 118

SaaStr

MAY 14, 2021

No matter how well you are doing post-Initial Traction in SaaS … you can almost always do at least 10-15% better. And SaaS is tiring. Because SaaS compounds. If you charge, say, $10 a month for your SaaS product, then just to get to $1 million in ARR (annual recurring revenues) … you need 8,000 paying customers!

Sales Hiring 270

Sales Hiring Scale Engineering Customer Success 270

SaaStr

NOVEMBER 14, 2023

Moving from a traditional SaaS to a pure consumption model was a challenging but fun transition for MongoDB. A Story About A Cobra Before talking about what consumption means today, Meghan shared a fable. You have to think about what behavior you’re trying to drive. There are still some complexities around SaaS-based approaches.

Compensation 164

Compensation Sales Azure AWS 164

SaaStr

JULY 20, 2019

Once you hit Initial Traction in SaaS, say that first $1m-$1.5m There is only so much you can spend on Adwords in SaaS. The one “channel” that never plateaus for the best SaaS companies is the % of revenue from your installed base. Net negative churn. One channel, often. E.g., partnerships.

Sales Hiring 237

Sales Hiring B2C Marketing Investment 237

SaaStr

JUNE 13, 2020

A little while ago, I Zoomed with a good friend running a SaaS company doing about $4 million in ARR. A really good SaaS company. Don’t Overly Sweat the Competition — in the Short Term — in SaaS If You Are Growing at Least 50-60% YoY. Yes, competition can be brutal in SaaS. And he was beside himself. More on that here ).

Sales Hiring 278

Sales Hiring Scale Headcount SaaS 278

SaaStr

MARCH 1, 2020

So here are 9 questions that will tease out what type of candidate they are, what they know, and what they really can do for you: What are the most important goals / KPIs for Customer Success at a company of our size and stage? What, if anything, could you have done to save them?

Customer Success 255

Customer Success Sales Hiring Leadership Interviewing 255

SaaStr

AUGUST 9, 2020

No matter what, we’d never be able to get to $1m in revenue fast enough, let alone profitability. All of a sudden, I could focus on what really mattered. Let me expand on it here since the original answer. Maybe it will be cathartic for you. It is true. Company survives to live another day and raise our Series B. And again in 2018.

Sales Hiring 354

Sales Hiring SaaS Revenue Churn 354

SaaStr

NOVEMBER 21, 2020

What a great VP of sales really does. What a great VP of marketing really does (tons on that here ). But as I now work with 24+ scaling SaaS companies, all of whom, all of us, who struggle to build a great management team … I’ve learned to distill it all down to one thing. When to hire her (more here ). One release.

Sales Hiring 352

Sales Hiring Scale Sales Recruiting Engineering 352

FastSpring

APRIL 26, 2022

Last week, I canceled an annual SaaS subscription (I had three weeks left until renewal). In the language of SaaS, I churned. And the experience got me thinking: Was immediate removal of paid features the best chance to keep me from churning? When did I officially count as “churned”? Part I: SaaS Churn Benchmarks.

Benchmarks 114

Benchmarks Churn Payments SaaS Payments 114

The Angel VC

DECEMBER 27, 2016

As the year is coming to an end I’d like to share a few thoughts on what we’ll be looking for in the SaaS world in 2017. If you don’t have negative net churn you’re losing an increasing amount of MRR every month to churn, simply because your churn rate is applied to an ever-increasing base.

SaaS 183

SaaS Artificial Intelligence AI User Experience 183