SaaStr

JANUARY 24, 2024

How do you diagnose and solve churn? So, Dini came in, looked at the data around churn and usage, talked to customers, defined and narrowed Lattice’s core ICP, and made a few changes: They put a minimum in place not to sell to anyone under $4k. Can you start and stop a PLG motion? Often, they do.

Scale 218

Scale Sales Hiring Scaling Revenue 218

Baremetrics

JANUARY 24, 2021

Anyone managing a SaaS or subscription business is aware of customer churn. That means achieving any essence of “growth” requires replacing lost customers faster than the rate at which they churn. Managing churn is much like a constant game of plugging holes in a bucket so that you can eventually have a “rising tide” of water.

Churn 71

Churn SaaS Payments Payment Methods Payment Solutions 71

SaaStr

JULY 14, 2020

It may be the most successful SMB-focused app of our current generation. Yes, nominal churn may seem lower by removing a monthly option. If they churn at the end of a yearly subscription, or 6 months into a monthly one, they’re still gone. Let’s take a look at Zoom. You just make buying your app harder.

Pricing 217

Pricing Payment Solutions Scale SaaS Payments 217

SaaStr

DECEMBER 27, 2020

Those of us who’ve been around a while think of New Relic as a freemium and almost SMB tool, but today 77% of their revenue comes from accounts greater than $100k. New Relic’s net negative churn / net dollar retention has dropped to 98% in the last quarter, despite a record 77% of revenue being from the enterprise.

Scale 291

Scale Outsourced Development SMB Cloud 291

SaaStr

FEBRUARY 14, 2023

Net Dollar Retention Shows SaaS’s Best Qualities NDR encapsulates SaaS revenues’ best qualities in one metric: the subscription-based model. To calculate your net dollar retention, take all of your existing ARR at the beginning of the period, add on any cross-sell or upsell, subtract out any churn, and then see the ending ARR.

Metrics 201

Metrics SaaS Marketing SMB 201

Clouded Judgement

DECEMBER 21, 2023

It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn). I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 177

Cloud Software Benchmarks Retention 177

SaaStr

APRIL 14, 2023

If you aren’t sure if you have a rock-solid value prop, look at churn, revenue, and even the ability or inability to raise funds. Investors want to know about metrics, the drivers of your business, and whether users are growing, engaged, or churning. Enterprise will likely have a different problem set vs. an SMB.

Development Team Review 211

Development Team Review Technical Review Underperforming Technical Team SMB 211

Clouded Judgement

SEPTEMBER 12, 2023

Extra pressures around optimizations still exist, however gross churn levels have stabilized, and commentary on earnings calls suggest conversations around new bookings are starting to pick up. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

Cloud 169

Cloud Software Benchmarks Retention 169

BrightBack

APRIL 6, 2020

The subscription industry is facing intense change as the landscape matures and companies race to stop customer churn related to the Covid-19 pandemic. The subscription industry is entering a retention-led phase of growth. The subscription industry is entering a retention-led phase of growth.

Subscription 59

Subscription Payment Features Retention Payment Methods 59

OPEXEngine

MAY 18, 2021

SaaS metrics are viewed differently at different stages of growth and for different sales models, primarily whether a company is selling into an SMB or enterprise marketplace. ARR is an essential subscription metric that identifies the recurring revenue expected on an annual basis from the subscriber base. Usage Fee-Based ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

SaaStr

JUNE 27, 2019

It may be the most successful SMB-focused app of our current generation. Yes, nominal churn may seem lower by removing a monthly option. If they churn at the end of a yearly subscription, or 6 months into a monthly one, they’re still gone. Let’s take a look at Zoom. Zoom does not play games. But that’s an illusion.

Pricing 177

Pricing SaaS Payments Payment Solutions Payment Services 177

Clouded Judgement

APRIL 12, 2023

It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn). I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 161

Cloud Software Benchmarks Retention 161

Point Nine Land

JUNE 18, 2023

By conducting a cohort analysis, you can track customer behavior, retention, churn, and revenue over time. Should I look at churn or retention cohorts? Both can be used to report on customers, subscriptions, and revenue. What’s the difference between customer churn and revenue churn? And both can be cohorted.

SaaS Payments 128

SaaS Payments Payment Services Payments SaaS 128

SaaStr

APRIL 28, 2019

Revenue Retention / Net Negative Churn of 143%. All the great SaaS companies IPO’ing now have strong revenue retention, whether SMB or enterprise focused. Even for Slack. A continued them of our 5 Interesting Learnings Series. Not burning that much cash. Yes, Slack has not been as efficient as Zoom.

Scale 275

Scale Venture Capital SMB Enterprise 275

Clouded Judgement

JUNE 20, 2023

It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn). I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 161

Cloud Software Benchmarks Scale 161

SaaStr

FEBRUARY 9, 2024

From a Go-To-Market perspective, Zapier uses a hybrid model that involves a combination of freemium offerings, subscription plans, and partnerships. They had been building toward an SMB audience, so hiring 50 people in sales against a product that wasn’t ready for a specific audience would’ve been a mistake. At the same time?

Scale 252

Scale Sales Hiring Sales Marketing 252

Clouded Judgement

DECEMBER 20, 2022

It is calculated by taking the annual recurring revenue of a cohort of customers from 1 year ago, and comparing it to the current annual recurring revenue of that same set of customers (even if you experienced churn). I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 130

Cloud Software Review Software Benchmarks 130

OPEXEngine

JUNE 11, 2020

Sometimes companies only include recurring revenues when they talk about bookings or billings, but they also sell Professional Services (and must book and bill them somehow). Pros and Cons: SaaS SMB vs. Enterprise Models. If you can identify the groups most likely to churn, you can do something about it and improve your performance.

SMB 59

SMB SaaS Benchmarks Subscription 59

Totango

JULY 8, 2021

First, you need to create a consistent and comprehensive system to track customer health score , which is a metric measuring whether customers are satisfied with your product or at risk of churn. Service Utilization: Is the customer fully utilizing their subscription?

Systems Review 65

Systems Review Underperforming Technical Team Payment Features Churn 65

Kellblog

JUNE 17, 2023

Executive Summary: Sales KPIs (Slide 5) Here we can see key metrics, cut by size, and grouped into five areas: growth & profitability, sales efficiency, retention & churn, GTM strategy, and sales productivity. Annual revenue churn (rate). I’ve never heard it put exactly this way, but this is some churn rate.

Scale 103

Scale Sales Benchmarks Metrics 103

Chart Mogul

APRIL 20, 2018

This week: How Blue Apron is struggling, how to think about category creation and practical advice for truly understanding who you're selling to in SMB. Subscriptions are reaching never-seen-before levels of scale. Is this the end of the subscription era? But there’s one overarching issue: customer churn.”

Subscription 45

Subscription Payment Features SaaS Scale 45

FastSpring

SEPTEMBER 2, 2020

Lifetime Value (LTV) is a metric that shows the average revenue generated by a customer before they churn. In between Q1 of 2011 and Q2, HubSpot dropped their monthly churn rate by nearly 1%. These methods are fine for short-term forecasting, but for subscription-based companies, the calculation gets a little more complicated.

Scale 128

Scale Payment Methods Payments SaaS Payments 128

Point Nine Land

NOVEMBER 10, 2020

The simple LTV formula The simplest formula to calculate LTV in a subscription business is ( Customer Lifetime x Gross Profit) , where customer lifetime is ( 1 / Customer Churn Rate) and gross profit is ( Average Revenue per Account (ARPA) x Gross Margin). One of them relates to negative churn. That makes no sense.

Outsourced Development 97

Outsourced Development Customer Lifetime Value Churn Forecasting 97

OPEXEngine

NOVEMBER 17, 2020

Subscription companies have to have a policy about when customers who have not renewed their subscription contract are no longer existing customers, and if they do resubscribe, they are now new customers. For monthly subscriptions, it may be the day after the subscription expiration.

Systems Review 52

Systems Review Technical Review Payment Features Scale 52

OPEXEngine

SEPTEMBER 22, 2020

As their prospectus states: “We use dollar-based net retention rate to evaluate the long-term value of our customer relationships, because we believe this metric reflects our ability to retain and expand subscription revenue generated from our existing customers.

Retention 59

Retention SMB Social Media Subscription 59

SaaSOptics

APRIL 30, 2019

Expansion ARR/MRR – existing customers who expanded their subscriptions or licensed additional products or modules. Contracted ARR/MRR – existing customers who downgraded their subscription. Canceled ARR/MRR – existing customers who canceled their subscription. Churn Metrics. Expansion and Upsell Revenue Metrics.

Metrics 91

Metrics SaaS Churn SMB 91

SaaStr

NOVEMBER 2, 2019

How does Krish think about purely serving the SMB market? How does he think about the mortality rate of SMBs? How does Krish think your customer acquisition and GTM strategy has to change with the movement from SMB to enterprise? How do you think about customers scaling out of that bracket and churn as a result?

Scale 127

Scale SaaS Payments Sales Recruiting Payment Services 127

Chart Mogul

FEBRUARY 19, 2021

It is a question of strategic importance for SaaS companies because of how the subscription model works. Similar to churn , we also need to discern between MRR retention and customer retention. In our example, we’re assuming a small number of customers who are mostly paying the same monthly subscription. Brian Balfour.

Retention 72

Retention Churn Benchmarks SMB 72

SaaStr

MARCH 20, 2020

318: The first step in success with SMB clients is to recognize that it’s not a one size fits all scenario. Companies need a specialized approach for SMB accounts, different than the tactics used for Enterprise. And you can see a lot of churn in those first couple of days. This episode is sponsored by TaxJar.

SMB 179

SMB Scale Startup Marketplace as a Service 179

CustomerSuccessBox

MAY 25, 2021

Considering how important it is for companies to hold on to their customers, having visibility into the churn is very important. Churn Analysis will help you know what is working well and what needs improvement. Here is a detailed process and framework for analyzing churn. Calculating Customer Retention.

Retention 52

Retention Metrics Outsourced Development SMB 52

ChurnZero

JUNE 11, 2021

A customer health score is a value that indicates the likelihood that a customer will renew their subscription or service with your company. As you accumulate more customer data, and tweak your scoring based off that data, the better your health score will be at predicting churn. Group A’ had a high risk of churn.

Software Review 96

Software Review Systems Review Underperforming Technical Team Scale 96

Chart Mogul

OCTOBER 9, 2020

Freemium buyers can be largely organized into two categories: Price-sensitive early-stage and SMB users who get started with your product for free, and convert to paying customers as their needs (and businesses) grow. These are your “ideal” Freemium customers who continue to contribute towards your revenue until they churn.

Scale 83

Scale Churn Metrics Retention 83

Baremetrics

NOVEMBER 9, 2021

Lower Churn Prepare for a Sale Where to Sell Going it Alone Through a Private Sale Working With a Broker for a Win-Win Situation. Important SaaS Metrics and Unit Economics Unit economics and SaaS metrics like churn rate will always be important. Churn Rate Churn rate basically defines the long-term trajectory of a business.

SaaS Payments 105

SaaS Payments Technical Review Development Team Review Software Review 105

Chart Mogul

FEBRUARY 19, 2021

It is a question of strategic importance for SaaS companies because of how the subscription model works. Similar to churn , we also need to discern between MRR retention and customer retention. In our example, we’re assuming a small number of customers who are mostly paying the same monthly subscription. Brian Balfour.

Retention 52

Retention Churn Benchmarks SMB 52

SaaStr

DECEMBER 14, 2020

“Churn” is a term we all use in SaaS as a core metric, but its roots, as near as I remember and can tell, come from our B2C colleagues. Folks churn out of their Verizon plan, their Netflix subscription, etc. In a low-end subscription model for a tool, not a solution (e.g., the dynamics are similar.

Churn 362

Churn Sales Hiring Systems Review B2C 362

ChurnZero

MARCH 18, 2022

Q: Should you be worried if your annual logo churn is between 25% to 30%?*. But if it costs you 40 cents to get a customer, or something really low, and you get a lot of customers coming in, and you’re churning through most of them, you can probably get away with it. Then, you can stop counting them as churn.

Customer Success 98

Customer Success Metrics SaaS Banking 98

OPEXEngine

MAY 12, 2020

So the world has awoken to the fact that during COVID-19, customer success, churn and retention are not just high priority, they are existential. They measure and optimize churn from day 1. At the same time, management teams are seeing churn rates go up. That means your clients are questioning whether they really need you.

Technical Review 59

Technical Review SaaS Software Review Sales Hiring 59