The SaaS Report 2019 – Growth, Churn, and Sales Stats

The SaaS Report 2019 – Growth, Churn, and Sales Stats

One of the best ways for any business to grow is by keeping up-to-date with what’s going on in the industry. This is especially true for fast-moving industries, such as SaaS. It’s vital to see what strategies are working for other companies as well as the tactics that are falling flat.

Of course, there are plenty of people offering different opinions. By looking at the actual statistics though, you can get a more accurate picture of what’s working (and what isn’t). That’s why we’ve collected the most relevant statistics covering growth, churn, and sales for SaaS companies. To make things easier, we’ve put them together a SaaS report in a handy infographic for you, along with the key takeaways you need to know.

Scroll down to discover:

  • How effective free trials are
  • How growth rate effects churn
  • The average annual contract value and plenty more


First, we wanted to get a clear picture of how successful SaaS companies are growing. What are their priorities, and how effective are they?

Takeaway: We’ll start with the good news. The future’s looking good for SaaS companies’ growth, with 2017 seeing a significant increase in ARR. This was true even for companies with ARR already above $25MM.

Takeaway: Companies are significantly prioritizing new customer acquisition as a way to maintain growth, while less than half rated upselling as a high priority. Only 59% rated existing customer renewals as a high-priority. Could this be contributing to higher churn rates? More on this later.

Takeaway: Interestingly, over a third of respondents don’t offer a freemium version or a free trial. For those who did offer a trial, the results were spread out fairly evenly. 18% found less than 10% of new business came from freebies, while 16% found more than half their new customers came from this method, making it seem like the freemium model can either be a big hit or an embarrassing miss for SaaS companies. The logical conclusion is a freemium model won’t make up for a substandard product.

Takeaway: Remember how 46% of SaaS companies made upselling a high priority? Over half of the companies surveyed saw less than 10% new revenue from upsells. However, 19% are still seeing >20% in new revenue, so it’s clearly possible to have decent returns on upsells. Another strategy that can either work well or not at all, indicating that the execution is critical.

Takeaway: When it comes to year-over-year revenue increase from existing customers, the most common result is a 1-20% increase. In fact, 70% of companies saw a revenue increase of between 1 and 40%. The increase drops off after that though, and respondents were more likely to see a decline than see >81% upsell. Still, when taking into account the lower costs of retaining customers compared to acquiring new ones, it’s clear that existing customers are a valuable source of increasing revenue for your SaaS company.

Takeaway: No sector is left behind, with all respondents investing significantly in Sales & Marketing, R&D, as well as the necessary general and administrative expenses. R&D narrowly takes the lead, indicating that developing product is the priority, while still focusing on sales and marketing.

Conclusion: Companies continue to prioritize acquiring new customers, even though it’s widely accepted that it’s better to focus on the existing customers. Why? The statistics give us a clue. While some companies are seeing great results from their existing customers, either from year-on-year increase or upsells, others are seeing very lackluster results. It’s important to remember that there aren’t any magic bullets here. Yes, it’s entirely possible to see massive upsells and revenue increases, but it’s not guaranteed. Rather, companies have to work hard to find the specific retention and upsell strategies that will work for them, and not give up after the first attempt.


On the opposite side of the coin to Growth, we have Churn. Churn is inevitable, but if your churn rate exceeds your growth rate, you’re in big trouble. What are the best ways to reduce churn? How do you even measure it?

Bonus: We recently asked seven of the leading experts for their most effective churn reduction strategies. Check out all their responses and see what would work for your business.

Takeaway: It turns out that not everyone measures their churn rate the same. The most popular methods are by the number of customers and by revenue, although there are still those that measure using other criteria. The important thing is to use metrics that are meaningful and measurable. For example, a company may raise their prices and see their number of customers fall, but at the same time enjoy increased revenue. Depending on how you measure your churn rate, this could either be a positive or a negative result. Like all analytics, make sure you’re measuring what really matters.

Takeaway: The vast majority of companies are successful at keeping their annual churn rate (based on revenue) below 10%. If your rate is higher, it’s highly likely that something’s gone wrong.

Takeaway: There’s not much difference between the results here, but it’s worth pointing out that 70% of respondents saw either no change or a decreased churn rate. If your churn rate is increasing, you should be concerned. Just take comfort that you’re in good company, with nearly a third of all businesses in the same situation.

Takeaway: By breaking down the results, we can see that low growth companies are the most likely to experience high churn rates. Medium growth companies were more likely to have medium churn. Interestingly, high growth companies seemed to divide customers the most, with 39% experiencing low churn, but a 34% rate for high churn (suggesting high growth companies have a polarizing effect, resulting in either love or hate, but rarely indifference).

Takeaway: What effect does the average contract length have on revenue churn? Logically, you’d assume the longer the contract you can get someone to agree to, the lower the churn rate. Generally, you’d be right. Where the average contact length is less than a year, the churn rate is 16.7%, but by securing a contract of 2.5 years or more, that almost halves to 8.5%. However, there’s an interesting finding: month to month contracts, at 14%, had lower churn rates than contracts of 1 year or 1.5 years. That means that—statistically—if you can’t secure contracts of 2 years or more, a month-to-month contract is the next best way to keep those churn rates low.

Takeaway: It turns out the way you sell your SaaS has a huge effect on your churn rate. Field Sales had the lowest churn rates and was the only method that fell below the median results. On the other hand, Channel Sales had the highest churn rates, reaching 17%.

Takeaway: There’s a huge difference between mobile and web platforms. If your customers are logging in to a mobile app, the monthly retention rate is 4x higher than those using a web interface. This could possibly be due to convenience and practicality. Either way, the results suggest you should invest in a mobile platform if you want to keep your retention rates up.

Conclusion: Churn is more complex than you might think, with companies differing on how they measure churn, let alone reduce it. There are also lots of different factors—such as contract length, platform, sales method, and even company growth rate—that can have an effect. To keep your churn rate to a minimum, start with a clear definition for how you measure churn, then use that to explore other strategies to lower it.


In our last section, we looked at the sales statistics for SaaS companies. What’s the bottom line? As we’ve already seen, many companies invest a significant amount into their sales and marketing, but what are the results? Here are our findings along with some SaaS sales tips you can adopt.

Takeaway: The average annual contract value is relatively well-distributed. The most common value is $25K-50K, while the next most common contract value is $1K-5K, which represents quite a difference on a company’s bottom line. It also shows there’s a lot of room for growth. If you’re looking for a new target, 0.49% of respondents have cracked the million-dollar mark.

Takeaway: Taking median initial contract value into account, field sales dominate for companies with median deals over $50K (and as we learned earlier, they also enjoyed lower churn rates). Inside sales strategies were the most popular among companies with $1K-$25K median deal sizes.

Takeaway: When it comes to SaaS conversions, patience really is a virtue. Less than half of users convert within the day. On the other hand, 87% of users take two weeks to convert.

Takeaway: When you sell a SaaS product, how often would you expect people to actually use the product? Numbers across the board were low, but SaaS users were typically twice as active as E-commerce users, racking up an impressive 2.8 days a month.

Conclusion: Sales are widely distributed, and unless you’re one of the minority with an average annual contract worth over $1mm, it’s likely you have room to grow. Inside sales secured the most sales, with field sales coming a close second. Finally, don’t be worried if your users aren’t converting right away; the vast majority take at least two weeks to convert.

Whether you’re worried about growth, churn, or sales, there’s plenty of data out there to help you benchmark your business and identify ways to improve.

Feeling inspired to try a new growth tactic? Whether you’re sending cold emails to prospects or responding to inbound leads, Reply can help you automate your outreach, while still keeping it personal. Try Reply today for free with a 14-day trial.


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