Similarly, net retention below 100% means churn and downgrades were greater than any growth you enjoyed from the expansion of existing customers. If that’s the case, you need to take action with Customer Success and Customer Support to try and reverse the trend. Generally we find it’s not a product issue, but rather a customer success issue and/or onboarding issue. Even though software is supposed to be easy, it’s not touchless and the customer will expect responsive and thorough customer service, especially for high ACV products. Likewise, if you don’t onboard the customer properly, we’ve found that you’re almost guaranteed to lose them.
In summary, net retention is a critical figure: if you’re at 110% you’re in line with the average, if you’re below 100% do a little work to figure out what’s happening, and if you’re ~120%+, you’re in great company.
Visit us at blossomstreetventures.com and email us directly with Series A or B opportunities at sammy@blossomstreetventures.com
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