July 27, 2016
SaaS, short for “software as a service,” is a business model that depends on selling subscriptions to a proprietary software, usually to businesses. Retaining clients is just as important to the bottom line as adding them in the first place. That's why the results of a new study are so surprising: Turns out not all SaaS professionals are tracking the right data.
Of the over 300 SaaS businesses polled, certain percentages tracked different metrics. One interesting number: 80 percent of the businesses tracked their churn, a valuable stat to keep track of, as it can explain why companies are choosing to stop using the service after initially signing up for it.
Robert Allen, who covered the data in a blog post at Smart Insights, unpacked this:
“It's good to see 80% of SaaS businesses measuring churn, as this is crucial to long growth, as this post on ideas to reduce SaaS churn shows. Really that figure should be closer to 100%. If you're not measuring churn then [you're] setting yourself up to fail.”
Also of note, Allen says: “surprisingly few measure customer retention cost.” It's just 35 percent of those polled. The full chart is below. See how your data measures up to the numbers of these SaaS professionals.
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