Image

SaaS Renewal Rate

2 min read

Sometimes you hear people in SaaS talk about their Renewal Rate and you wonder what they exactly mean. This post will help you understand, calculate and define SaaS Renewal Rates.

Before you read this post we recommend you reading our short post about Calculating SaaS Churn

This blog post will cover the definitions for:

SaaS Renewal Rate ($)

1. Renewal Rate (#)

Count Renewal Rate is defined as: # of customers who renew their contract / total number of contracts up for renewal

Example 1: you have 100 clients,10 are coming up for renewal this month, 2 of them churn

Your renewal rate is 80% (8/10)

2. Renewal Rate ($)

Dollar Renewal Rate is defined as: the total value of renewed contracts / total value of contracts up for renewal

Example 2: you have 100 clients, they all pay $12,000 for a 12 month contract ($1,000 MRR),10 are coming up for renewal this month, 2 of them churn

Your renewal rate is: 80% ($8,000 MRR / $10,000 MRR)

Example 3: you have 100 clients, they all pay $12,000 for a 12 month contract ($1,000 MRR),10 are coming up for renewal this month, 2 of them churn but you manage to up-sell one of them (from 1,000 MRR to $4,000 MRR)

Your MRR Renewal Rate is: 110% ($11,000 MRR / $10,000 MRR)

The key take aways:

1. Count Renewal Rate can, at its best, be 100%

2. Dollar Renewal Rate can (and should be!) more than 100% for a SaaS business.

Read Dave Kellog's post here if you want to drill deeper into this metric

How PushPress maximizes time and resources using a Customer Platform

Discover the success factor behind PushPress’ customer success, with Director of Customer Success, Gavin Danfelt-Martin.

Roles in a Customer Success Division

As you grow your customer success division, these are the roles and responsibilities you should add to your team.

RFP for Customer Success Software: Best practices 2023

Create an RFP for Customer Success Software - or download our template

Learn more about
Planhat

Drop your email and let us show you our platform!

Get a Demo

We look forward to showing you Planhat.
Tell us a bit about yourself.

Please enter your business email address. This form doesn't accept addresses from that email service.

By submitting this form, I understand and agree that Planhat may collect, process, and retain my data pursuant to Planhat’s Privacy Policy.

Thank you! 🙌

Thank you for your interest in Planhat.
You will hear from us soon!

Error!

Sorry, an unexpected error occurred. Try again later!

Thank you! 🙌

Thanks for contacting us. We will get back to you you shortly!