Zuora's annual subscription economy report it out! Some takeaways:
1. Subscription companies continue to outperform their product-based peers by wide margins, growing revenues approximately 6X faster than S&P 500 companies (17.8% versus 3.1%)
2. Subscriber growth took a big dip in Q1 as the pandemic started, but rebounded in a big way in Q2
3. Revenue per user slows slightly. Overall for the SEI, growth in average revenue per account has slowed compared to the end of 2019, in some cases representing users who refrained from upgrading services in an economic downturn + more discounts
4. SaaS businesses selling to SMB customers experienced the lowest growth by far (2.8%). SaaS selling to enterprises saw 14% growth, and overall SaaS saw ~19% growth. This means the mid-market segment preformed by far the best
5. B2Every companies saw a surge in account growth as COVID-19 requirements drove most companies to quickly adapt and leverage remote workforce solutions. Overall, new customer acquisition in B2Every SaaS was nearly 2.4 times that of 2019’s rate.
6. Subscription businesses used discounts to retain customers: Subscribers receiving discounts grew by 10% in the first 2 quarters of 2020, while the average discount was 18% higher compared to 2019.
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