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SaaS - Delinquent Account Benchmarks & Best Practices?

Hi,

I was wondering if there are any good benchmarks out there to measure the % of delinquent accounts in your subscriber base.

In Otherwords, if 10% of your subscriber base is delinquent (we were unable to authorize their credit card), is that high? Are there ways to reduce this number (other than converting more annual contracts and collecting cash up front)?

Best,

Karl

3 Replies

Manvinder Singh
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0
Manvinder Singh Entrepreneur
SaaS Business Development & Strategy @ Google
I haven't seen benchmarks for delinquency but since most SaaS products have <10% churn overall (I've see surveys suggesting 50% have <5% churn), and assuming most of these 10% delinquencies will will churn, it does seem on the higher side. However, i think it depends on the mix of outbound / inbound acquisition as well. ie., more outbound acquisition-> customers signing up too soon before being convinced of value-> more churn


Manvinder Singh
1
0
Manvinder Singh Entrepreneur
SaaS Business Development & Strategy @ Google
Actually i came across this discussion

http://www.quora.com/What-are-the-industry-average-rates-for-involuntary-churn-on-credit-card-subscriptions

which kind of implies that credit card failures account for 15 to 50% of overall Churn... Assuming 6 to 8% overall churn. Credit card delinquencies are probably around the 2-4% range generally
Scott Elrod
3
0
Scott Elrod Entrepreneur • Advisor
mHealth technologist☁ex-COO/CIO@Cloud 9-tech for behavioral health■ex-CIO@AmeriDoc(now Teladoc) healing 1.5M patients
Roughly, 70% of successful SaaS companies: annual churn in the < 10% range, with most at 5% or under. That's 5-7% Annual churn, which translates to 0.42 - 0.58% monthly.
Know your Monthly Recurring Revenue (MRR) numbers, and if they are looking poor, utilize a predictive retention servicing company, like
http://www.preact.com/ or
http://birtanalytics.actuate.com/churn-prediction

If you have cc's via Stripe or similar processor that has an api , there are some creative companies linking the payment gateway APIs into abandon rate guesses.
https://bestunning.net/ or
http://churnbuster.io/




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