Rob Levey’s Post

GRR, NRR, and churn rates are no longer the most important metrics of CS. Multi-Year deals rate is. How many of your customers are willing to commit and contractually agree to more than a 12-month renewal term? The multi-year deal is a mutual statement of partnership, trust, and the criticality of your tech solution for the customer. It can drive efficiency in the annual procurement process and allow both teams to focus on what's important the most - getting even more value from your technology! SAAS is all about revenue predictability so instead of renewing for 12 months, here's how you can start driving 24 months renewals: 👉 Identify the right customers in your BoB for 24-month renewal terms (ideally they are the ICP as it's not the right approach to all customers) 👉 Build an incentivized offer for 24 months, which also means prioritizing longer commitment over revenue. 👉 Adjust your CSM's commission plan to support this strategy (especially if your team is a revenue-driven CS). 👉 Measure every quarter the % of customers who renewed for 24 months& the incremental ARR for the second year. Set these metrics as a goal / OKR for 2024. #customersuccess #saassecurity #saas

When someone says GRR, do they mean real GRR? ...or IMPOSTER GRR? In my world Gross Revenue Retention should measure ALL the churn -- The customers who completely churn PLUS the DOWNSELLS (fewer seats, lower prices, fewer modules, lower tier of service, etc.). Some companies compute GRR by measuring just the customers who churn 100%. It’ll sound better —- lower “GRR” — but they’re ignoring the downsells. “Our NRR is 102%, but GRR is strong -- in the low 90s%.” If this is a company with an active GTM team, then I’m going to be like….. Hmmmmm…..🤨 Now, if they’re just trying to say that less than 10% of ARR was lost due to customers canceling?  Then ok, that makes sense. But if they say, “No, no. GRR is low 90%s INCLUDING DOWNSELLS”… Then I’m skeptical. Why? Because the only way that happens is if downsells are mid- single digit.  And of course with 102% NRR, upsells can only be a few points higher. But that sounds like a really inactive customer base, without a lot of upselling or downselling.  Are customers that locked in? For a company in an active space, it just doesn’t compute. The truth is many companies report GRR this wrong way, leaving out downsells. ‘cause it sounds better. Which is a shame…. And you might ask -- Who cares?! It’s just a definition! But here’s why: Not knowing downsells means we don’t know the economically important number! It’s these economics that make real GRR  such an important metric. Arguably more important than NRR! Let's get this right. #SaaS #metrics #benchmarks #GRR #NRR #churn

What are the 5 most important metrics for determining valuation of a SaaS company? * Retention * Recurring revenue growth rate * Gross margin * Market size * Sales efficiency (LTV:CAC, etc.) These are the metrics buyers are going to want to see when evaluating your business. But, interestingly, there is no standard definition for how to calculate these metrics. Buyers do have certain expectations, but the baseline calculation for any of these metrics may not match your business model. Take retention. Even if your overall logo retention looks poor, there may be underlying dynamics not apparent at face value. For example, if you have one category of customer that churns at a high rate but only represents a small portion of your revenue. The takeaway is that there's no one-size-fits-all definition of these metrics. Part of preparing your business for an exit is to create a credible definition of these metrics that paints a more accurate picture of your business and is also a sophisticated analysis that buyers will accept. #founders #pathtoexit

𝗖𝗼𝘂𝗹𝗱 𝟮𝟬𝟮𝟰 𝗯𝗲 𝘁𝗵𝗲 𝘆𝗲𝗮𝗿 𝗼𝗳 𝗿𝗲𝗶𝗴𝗻𝗶𝘁𝗲𝗱 𝗴𝗿𝗼𝘄𝘁𝗵? 📈 Our January SaaS Benchmarks data shows that while customer acquisition has been challenging for the past two years, some segments are finally starting to see some light. The median recurring revenue growth rate for SaaS companies in the $8-$15M and <$300k ARR ranges increased over 7pp and 3pp accordingly, in January from the previous month. Neither segment had seen such improvements since the autumn of 2022. We know from our data that growth has often hinged on customer retention. Median net revenue retention remained relatively steady in January, ending at 64%, matching December 2024, but slightly down from January 2023 (65%). Since the start of the pandemic, the highest value was just below 70% during 2021. While it's too early to declare the trend for 2024, these glimmers of growth being reignited certainly give me hope. What are your thoughts? 🧠 #SaaS #datadrivenInsights #startupgrowth

The state of SaaS #churn and #retention "We’ve analyzed mountains of data across millions of cancellation sessions and failed payments, and unraveled it all to figure out why customers cancel, how they feel when they leave, and the most common reasons why card payments fail." Spoiler: This is not only about #B2C churn in an ecommerce environment By: Churnkey https://lnkd.in/diFJ8ZVz

You might think your SaaS company is on the right track, but are you measuring the metrics that truly matter? If your RevOps metrics are not driving your decisions, you might be flying blind. Here are the vital signs you need to be monitoring: 1) Customer Acquisition Cost (CAC): ↳ Understanding how much it costs to acquire a new customer helps you focus on efficient marketing and sales strategies. If you don’t know this number, you’re just guessing. 2) Customer Lifetime Value (CLTV): ↳ This tells you how much revenue you can expect from a customer over the duration of your relationship. When CLTV > CAC, you’re setting yourself up for sustainable growth. 3) Churn Rate: ↳ Keep a pulse on how many customers stick around. High churn means you need to pivot. Fast. 4) Monthly Recurring Revenue (MRR): ↳ This is the lifeblood of any SaaS business. Tracking MRR helps you forecast growth and cash flow accurately. 5) Net Promoter Score (NPS): ↳ Sometimes, it’s not about the numbers, but how your customers feel about you. An NPS survey can be like a personal check-in for your business. If you want to level up, knowing these metrics is non-negotiable. What are you tracking that I missed? Let’s share ideas and help each other grow! #SaaS #B2BSaaS #Metrics #CAC #CLTV #MRR #ChurnRate #NPS #RevOps #TheCluelessCompany

Here’s a wake-up call: SaaS companies lose 20% of their revenue yearly due to churn. That’s a huge hit, especially when a little focus on retention could turn things around! A company with 120% NRR can grow 4x faster than one with 80% NRR. It’s not rocket science – it’s customer satisfaction. If we’re serious about stopping the churn, we need to be disciplined about retention. We should start compensating based on the net promoter score and build NRR into the partner enablement strategy. Let’s put customers first and watch the growth follow! #SaaS #retention #channelpartner #SaveTheChannel #SaaSretention https://lnkd.in/e4hbDGXR

Did someone say… first place?! 🥇 We’re excited to share that we scored first place for Sales Analytics in Vendr’s Q1 2024 SaaS Trends Report! 🎉 But wait, there’s more! 🏆 We’re honored to be among the top 10 suppliers based on renewal volume 🏆 We’ve been in the top 10 for the past five quarters Read the full report 👉 bit.ly/44rZZLi #zoominfo #gtm

Let’s talk net revenue retention (NRR), folks. Did you know a company with 120% NRR can grow its top line by 375% in just four years? Compare that to only 90% growth with 80% NRR. The kicker? Many SaaS companies lose 20% of their revenue annually due to churn. Why? because the focus hasn’t been on retention—until now. If we want sustainable growth, we must start compensating partners based on customer satisfaction (hello, net promoter score) and offer NRR-focused enablement. The future of SaaS depends on it! #SaaSgrowth #SaaS #channelpartner #NRR #SaveTheChannel https://lnkd.in/e4hbDGXR