NRR is down. What are you going to do about it?
In the current market environment, declining trends in Net Revenue Retention (NRR) should serve as an urgent catalyst for cross-departmental action. While NRR remains an important metric, it shouldn't be the only lens through which we assess customer value. It's crucial for Sales, Marketing, Customer Success, and Product teams to align on a multifaceted approach, incorporating a variety of metrics that can offer a more complete picture of customer behavior and value. This month's newsletter aims to provide a 360-degree view on the subject, featuring insights and best practices not just from practitioners on the front lines but also from venture capitalists who have a stake in long-term business sustainability and growth.
We will explore traditional metrics like NRR, as well as alternative viewpoints that contribute to a fuller understanding of customer retention strategies. So let’s get started—because recognizing the complexity of customer behavior and taking collective, informed action is no longer just advisable; it's a business imperative.
Evolving NPS From Dial-Up to Fiber Optic: What We Can Learn from Blockbuster, Fax Machines and Paper Maps
The article delves into the limitations of the Net Promoter Score (NPS) in today's evolving consumer landscape. It introduces Customer Perceived Value (CPV), a more nuanced metric that aims to fill the gaps left by NPS. Through case studies and direct comparisons, the article provides actionable insights for businesses seeking to modernize their customer feedback methods. Readers will learn how CPV can offer real-time, comprehensive insights for enhancing customer experience.
Net revenue retention (NRR): What it is and why it matters for SaaS businesses.
Stripe provides a comprehensive understanding of why customer retention is crucial for SaaS businesses, how it impacts profitability, and how to measure and interpret it through metrics like NRR. The article also offers actionable insights for early problem detection and long-term strategic planning, providing a complete toolkit for evaluating and enhancing the health and growth potential of a SaaS business.
Smooth Scaling Podcast
Creating renewal processes that support 10x growth and 150% net retention
An Insight Venture's podcast interview with Michaela Downs, Head of Global Sales Operations at Benchling about rapidly scaling the customer base by 10x while growing a high-performing sales organization.
Blossom Street Ventures Blog
Net dollar retention trends in SaaS
The analysis focuses on net dollar retention (NDR) trends among 64 SaaS companies that have gone public since October 2017. While the current median NDR of 115% remains strong, it shows a decline from over 120% in the first half of 2022. However, there are indications that NDR rates may be stabilizing, as Q4 2022 also reported a 115% figure. More data is needed for conclusive insights on stabilization.