SaaStr

APRIL 24, 2022

BowtiedCocoon: Top SaaS SMB AEs have $125k OTEs. Navigating the CRO and CMO Relationship with G2 and SalesLoft: Mike Weir, Chief Revenue Officer, G2; Steve Goldberg, Chief Revenue Officer, SalesLoft; Amanda Malko, CMO, G2. Revenue Marketing: Build for Scale with Podium’s SVP, Revenue Marketing Jess Weimer.

Sales Hiring 274

Sales Hiring Revenue Scale SMB 274

SaaStr

JANUARY 24, 2024

How do you diagnose and solve churn? Solving High Volume, Low Conversion at Lattice Dini Mehta joined Lattice at $3M in revenue when it had just 10 people in seat for Go-To-Market and 7 salespeople. Joining Box as CRO When They Had a Churn Issue Mark joined Box four years ago at $600M in revenue and 4-5 years past IPO.

Scale 229

Scale Sales Hiring Scaling Revenue 229

SaaStr

DECEMBER 3, 2023

Non-Recurring Revenue Doesn’t Count, At Least Not as Much. If your revenue from any stream can go down in a given month or quarter, it’s not recurring. Pass-Through Revenue Simply Doesn’t Count. Is it OK to recognize pass through revenue as “revenue”? Loss-making Hardware Revenue Doesn’t Count.

SaaS Payments 206

SaaS Payments Metrics Payments SMB 206

SaaStr

NOVEMBER 21, 2020

At least 100% net negative churn (i.e., upsell/account growth + renewals – churn) for very small businesses. Let’s look at some of the top public SaaS companies: Shopify — very SMB: 100%. Hubspot — mostly SMB: 100%. Surverymonkey — fairly SMB, but going more enterprise: 100%. 119% net revenue retention.

Retention 333

Retention SMB SaaS Enterprise 333

SaaStr

APRIL 26, 2023

Only 32% of Revenue From Websites. The majority of its revenue comes from ecommerce. Their pure website revenue, which they call “Presence”, is just 32% of their revenue. #2. Most of the website / presence growth came from price increases, which saw limited churn as a result. 68% From Ecommerce.

Scale 229

Scale SMB Churn Pricing 229

SaaStr

JUNE 2, 2022

Two things though did get hit harder — SMB Churn and Upsell s. Customers kept buying more SaaS than ever, which masked all-time high churn in SMB accounts. SMBs just plain went out of business in ’08-’09. So our gross SMB churn spiked to a crazy high of 5.5% Go forth and conquer.

SMB 310

SMB SaaS Churn Enterprise 310

User Pilot

JULY 18, 2023

Tracking your customer churn rate will help you keep tabs on business growth. You will have data sets for analyzing your churn/retention history, which will better position you to make intelligent business decisions. Types of churn rates you should calculate: customer churn rate, revenue churn rate , and involuntary churn rate.

Churn 87

Churn Payments SaaS Payments Payment Solutions 87

SaaStr

JUNE 8, 2022

ARR, Zoom was an SMB powerhouse, with Enterprise growing. SMB is now saturated at $4B ARR and not growing, but Enterprise is picking up the slack and growing faster than ever. 5 Interesting Learnings: #1 $100k+ customers are now the engine, not self-serve SMBs. ARR … which it did in just 1 year (!!)

SMB 279

SMB Enterprise Engineering Scale 279

SaaStr

JULY 31, 2022

The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long. SMB SaaS has a lot going for it, but one big existential challenge — inherent churn. SaaStr 572: 10 Mistakes in Building Out Your Revenue Organization: A CEO’s Perspective with Insider CEO Hande Çilingir.

New CTO 248

New CTO CTO SMB Venture Capital 248

SaaStr

JULY 22, 2021

That’s the power of compounding revenue right there: 5 Interesting Learnings: #1. 180,000 revenue per employee. We’ve seen this with sales-drive SMB and SME leaders like Xero as well. If you are selling to SMBs, you have to be very efficient. Gross annual churn of 4%, NRR of 107%.

Scale 323

Scale SMB compliance Churn 323

SaaStr

JANUARY 2, 2021

We can see that NRR for tiny customers is probably about 100%, as it is for other SMB leaders. Again, the latest crop of Cloud IPOs shows SMBs seem to have no limit in terms of TAM, with SMB growth at Shopify and Zendesk keeping up with enterprise, and even at Asana, SMB growth is still impressive at $250m ARR.

SMB 343

SMB Enterprise Cloud Churn 343

SaaStr

JUNE 22, 2023

My list: Not committing to 24 months upfront to getting to Real Revenues and a Minimum Sellable Product. It takes 7–10 years to build something real, and the first stage is the 18–24 months it takes to get real revenues and something off the ground. SMB folks want to go upmarket because there is too much churn in SMB.

SMB 232

SMB SaaS B2C Interviewing 232

SaaStr

DECEMBER 26, 2020

And produce a lot less revenue per interaction. That often starts to not feel worth it after just a few million in revenue. Every call takes the same amount of time, but the small ones produce so much less revenue. Small customers churn at a much higher rate. Probably more. ” Which is true. ” Which is true.

SMB 349

SMB Sales Hiring Marketing Enterprise 349

SaaStr

JUNE 7, 2021

If your SMB product requires or has a salesperson involved in closing, that’s a clear sign you also want a human being involved in making sure that customer is a success post-sale, too. Just assign a certain amount of ARR per each SMB customer success manager. Support has to handle a lot of routine SMB issues anyways.

Customer Success 324

Customer Success Scale SMB Sales 324

SaaStr

FEBRUARY 17, 2021

While Wix’s actual churn is a bit unclear, this is a super interesting presentation of CLTV. That’s the power of recurring revenue. Efficient at SMB marketing — an ~8 month CAC. 43% of Revenue Outside the U.S / North America. Quite an incredible SMB success story! Over Next 8 Years. Impressive.

Payment Methods 280

Payment Methods Payment Solutions Payments SMB 280

SaaStr

JUNE 29, 2022

It’s moved beyond its tiniest customers, of an ACV of < $1k, but other than that, it’s going upmarket without giving up its SMB roots. In fact, Q’22 was Zendesk’s highest first-quarter revenue increase in history. Even though Zendesk still has thousands and thousands of SMB customers. #2.

SMB 267

SMB Scale B2B Metrics 267

SaaStr

SEPTEMBER 17, 2023

LIVE from Annual Stage A Masters: How Revenue Leaders at Box, Calendly, and Lattice Created Sales Acceleration Moments The post Top SaaStr Content for the Week: Craft Ventures’ Founder & General Partner, QED’s Partner, Y Combinator’s Managing Director and lots more! The Next Best in About 5 Years.

Scale 219

Scale Management SMB AI 219

SaaStr

APRIL 13, 2023

And so many different strategies, from more enterprise to more SMB, from more tech focused (Asana) to less tech focused (Monday). 135% NRR from larger customers and 120% for $5k+ customers remains top-tier, especially for a vendor with plenty of small SMB customers. 39% of Revenue Outside U.S., 39% of Revenue Outside U.S.,

SMB 240

SMB Outsourced Development Enterprise Scale 240

SaaStr

JANUARY 12, 2021

Xero is a very interesting SaaS case study with (x) the majority of its revenue outside the U.S., Here are a few: All the way until $600m+ ARR, the majority of Xero’s new bookings and revenue still came from Australia and New Zealand! Churn is 1.1% Xero’s SMB churn isn’t zero. So nail a niche!!

Customer Lifetime Value 224

Customer Lifetime Value SMB Churn Scale 224

SaaStr

OCTOBER 29, 2020

Zendesk’s churn is still a bit higher than pre-Covid, but is almost back to pre-Covid levels. And expansion revenue is higher than pre-Covid. So if you sell to SMBs, or a mix of SMBs and enterprise like Zendesk does (with 160,000 total customers), well … enough with the excuses on churn. No excuses.

SMB 238

SMB Enterprise Churn Retention 238

SaaStr

JANUARY 4, 2023

Very Few Professional Services — Only 3% of Revenues. ProServ is only 3% of Okta’s revenues. International Revenue Steady at 22% of Revenues — and EMEA is strong. Customer Count Up 22%, While Revenues Up 37%. High NRR leads to revenue growing faster than your new customer count. #7.

Scale 284

Scale Headcount Sales Hiring SMB 284

SaaStr

MARCH 20, 2021

Traditionally, that has meant even 100% Net Revenue Retention can be tough when 20%-30% of your customers may be out of business in a given year! Smartsheet: 123%+ NRR from all customers, so probably ~110% from SMBs : #2. Zendesk: 112% NRR overall, with 40% SMB. So probably again around 100% NRR from SMBs.: #3.

SMB 248

SMB Churn Retention Enterprise 248

SaaStr

MARCH 12, 2023

Check out this week’s top blog posts, podcasts, and videos: Top Blog Posts This Week: The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long (Updated) The 8 Signs of a Failing Sales Rep. Each week, we round up our most popular content so you can catch up on anything you may have missed.

Scale 198

Scale SMB Sales Scaling 198

SaaStr

OCTOBER 2, 2022

The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long (Updated). Check out this week’s top blog posts, podcasts, and videos: Top Blog Posts This Week: Why Your Cost of Sales Generally Doubles As You Scale. State of the Cloud 2022: The Centaur Report With Bessemer Venture Partners (Pod 593 + Video).

Cloud 259

Cloud Scale SMB B2B 259

SaaStr

NOVEMBER 9, 2019

Churn much past 3% a month IMHO is not really recurring revenue anymore. A lot of tools that sell to individuals and very small businesses do see churn around 7% a month though. You can survive in a very high churn VSB/SMB market, but your CAC has to be super low. You can always decrease churn a bit.

Scale 115

Scale Churn SMB Scaling 115

SaaStr

MAY 19, 2019

What lessons can we learn from this huge Kiwi SMB success, for other founders? Here are a few: All the way until $600m+ ARR, the majority of Xero’s new bookings and revenue still came from Australia and New Zealand! Churn is 1.1% Xero’s SMB churn isn’t zero. subscribers. Zoom, PagerDuty, etc.).

SMB 218

SMB Customer Lifetime Value AWS Churn 218

SaaStr

SEPTEMBER 29, 2022

Channel model and organic approach to SMB and mid-market yields a fairly efficient Sales & Marketing motion. Together, it means they only spend 38% of revenue on Sales & Marketing. Together, it means they only spend 38% of revenue on Sales & Marketing. That’s fairly efficient.

Scale 234

Scale SMB Software Development Cloud 234

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 302

Scale Outsourced Development SMB Cloud 302

Clouded Judgement

APRIL 11, 2024

The first few months of this year felt like a lot of churning in the market. It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 177

Cloud Software Azure AWS 177

Tom Tunguz

MAY 5, 2013

Kenny van Zant drew this diagram for me on white board and I think it’s the best visualization of how SMB SaaS freemium business grow. The diagram highlights a few important mechanics of the SMB SaaS business model. A few of these customers grow into SMBs and become paying customers - they cross the dashed line in this diagram.

SMB 100

SMB Scale SaaS Mobile 100

SaaStr

MAY 25, 2022

If Momentive / SurveyMonkey had stayed 100% self-serve and low end, it likely wouldn’t be growing much at all, with self-serve revenue now only growing 7%. Far forward to today, 1/3 of its revenue is sales-driven, but it’s the core growth driver, up 35%. #2. A different way to look at the prior point.

Scale 242

Scale Payments Payment Solutions Payment Services 242

SaaStr

APRIL 7, 2021

“SaaStr 415: Fighting Churn with Data featuring, Carl Gold, Chief Data Scientist at Zuora “ A great session from SaaStr on perhaps the #1 more important topic at scale … fighting churn. #3. And how to win in a very competitive market. #7.

Scale 163

Scale SMB Churn Scaling 163

SaaStr

APRIL 23, 2021

121% NRR from SMBs — up from 110% at IPO. This is pretty impressive, although on reflection, perhaps what one would expect from a mission-critical SMB app. We run a lot of SaaStr on Bill.com and have for years, and won’t churn. Transaction fees (on payments) are now half of revenue and are the key to scaling.

Payment Solutions 321

Payment Solutions Payments SaaS Payments Payment Services 321

SaaStr

APRIL 4, 2023

This means you can raise prices, add modules, and expand, increasing the average revenue per customer account (ARPA). If churn doesn’t grow, your lifetime customer value is at its peak. Not only did they bring in and convert more leads, but they also moved part of the customer base upmarket, increasing LTV and revenue.

Scale 230

Scale Strategy Scaling Outbound Sales Team 230

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

MAY 26, 2019

Its growth has been more slow-and-steady than traditional rocketship, crossing $69m in Q4 revenues (let’s call that $280m+ in ARR, so soon to be $300m) — growing 17% a year by revenue, and 10% a year by customer count. That is a similar revenue growth rate to Salesforce’s core CRM product. A few learnings: 1.

Scale 236

Scale SaaS Payments Payments Payment Services 236

SaaStr

MARCH 19, 2021

No lead commit, or revenue commit. A head of customer success that doesn’t own churn, or net revenue retention in the first 90 days. No VPS can be great at inbound, outbound, field, SMB, Enterprise, Channel Partners, Strategic Accounts, High Velocity Sales. Something sounded off. His opportunity commit.

Sales Recruiting 322

Sales Recruiting Sales Hiring SMB Engineering 322