In the report, we analyze gross and net retention across other key SaaS metrics like growth, ACV, funding, channel sales, and billing frequency
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RETENTION
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In Q1 of each year, SaaS Capital conducts a survey of B2B SaaS company metrics. This year’s study marked our 8th annual survey and it continues
to grow year-over-year with over 1,100 private B2B SaaS companies responding, making it the largest survey of its kind. Below are our findings
on retention. Future research briefs will cover growth rate, channel partnerships, departmental spending and a new area of questioning this year:
employee stock option plans.
2019 B2B SAAS RETENTION BENCHMARKS
Because of its compounding effect on growth, revenue retention is now well established as the most important metric for
ensuring medium- to long-term business health. New sale bookings versus revenue retention is the SaaS version of “offense
wins games, defense wins championships.” Because of its importance, we publish a lot of research on retention rates,
and below is our most recent survey data cross-referenced against other important figures like growth rate, funding and
spending.
First, definitions. We asked companies to report their net and gross annual revenue retention data. Customer account
retention may be a useful metric for you to track, but our focus in the survey, and generally the retention metric we think
the most important, is based on dollars of revenue. We define net retention as:
(Monthly Recurring Revenue in “June of 2019” only from customers who were customers in “June 2018”)
÷
(Total MRR in June 2018)
This number can be anything from 0% to well above 100%, as it includes up-sells, new product cross-sells and price
increases. Annual gross retention is the same formula, excluding the upsells, cross-sells and price increases. (For easy
calculation, set each customer’s 2019 MRR to be less than or equal to their 2018 MRR.) For this reason, gross retention
cannot ex