Totango releases 5th annual metrics report discussing SaaS

Josiah Motley · February 2, 2016 · Short URL:

Churn is up, customer acquisition is up, new business from free trials is down

Customer success company, Totango, has released their 5th annual metrics report dealing with Software as a Service, or SaaS. The company, focusing on customer health and retention, has been releasing these reports since 2011 to gauge things like turnover rates, customer retention rates, and missed opportunities in the realm of SaaS. This reports takes into account over 300 SaaS professionals, down slightly from last year's 500+ responses.

Totango 2015 SaaS metrics report

The metrics report brings to light many of the issues, and hopefully solutions, to the SaaS industry.

The general state of SaaS metrics is positive, with slightly over 50% of those questioned happy with their metrics. This has stayed pretty steady, however, with no significant increases since 2013 when there was a noticeable jump in the positive direction.

One interesting statistic presented in the report is that churn rate, or rate which customers stop subscribing, continues to rise. More than two-thirds of those those surveyed saw a churn rate of 5% or more. While these numbers are concerning, upon dipping deeper into the report they actually start to make sense. Companies are putting huge effort and funding into obtaining new customers, but are not giving existing customers nearly as much attention. 27% of those interviewed noted customer renewals and upsells as being a 'low priority.'

That's not to say these companies are not aware of churn rates and customer retention. Within the report, the percentage of responders tracking new customer acquisition metrics has basically stayed the same over the years, but metrics on existing customers and upsells have seen an upward trend over the past few years, with efforts being put into place to do a better job of tracking that subsect.

There's a lot more information in the report, so if you're in the SaaS industry, make sure to check it out here.

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Josiah Motley

Contributor at various blogs, with a focus on tech, apps, gadgets, and gaming.

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