What is Net Revenue Retention (NRR)?

NRR measures whether your existing customers are spending more or less over time. Above 100% means expansion revenue exceeds churn—your customer base grows even without new logos. The best B2B SaaS companies have NRR above 120%.

What is a good retention rate?

For B2B SaaS, aim for 85%+ annual gross retention (logos) and 100%+ net retention (revenue). Below 80% retention means you're churning faster than most companies can grow. That's an existential problem.

How do I find out why customers leave?

Ask them directly. Within a week of churn, call and ask: 'What would have made you stay?' You'll hear the real reasons—missing features, poor support, lack of adoption, or price. Look for patterns across churned customers.

When should I focus on retention vs. acquisition?

If retention is below 80%, fix it first. Acquiring customers into a leaky bucket wastes money. Once retention is healthy, shift focus to acquisition. The best companies balance both—they don't ignore one for the other.

Retention

Do customers stay and grow?

Retention is whether customers stay and expand. In B2B, acquiring a new customer can cost at least 5x more than keeping an existing one. High churn makes growth feel like filling a leaky bucket — you pour customers in the top and they drain out the bottom.

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What this measures

What percentage of customers renew (or would renew, based on early signals)?
Do you know why customers leave?
Are customers spending more over time (upgrading, adding users, buying more)?
If customers spend more over time, your Net Revenue Retention is above 100%.

What to do about it

If this area is broken

Call 5 churned customers. Ask what would have made them stay.

If this area needs work

Implement a simple check-in at 30/60/90 days.

How this connects

Depends on

Problems here often trace back to gaps in:

Frequently asked questions about retention

What is Net Revenue Retention (NRR)?: NRR measures whether your existing customers are spending more or less over time. Above 100% means expansion revenue exceeds churn—your customer base grows even without new logos. The best B2B SaaS companies have NRR above 120%.
What is a good retention rate?: For B2B SaaS, aim for 85%+ annual gross retention (logos) and 100%+ net retention (revenue). Below 80% retention means you're churning faster than most companies can grow. That's an existential problem.
How do I find out why customers leave?: Ask them directly. Within a week of churn, call and ask: 'What would have made you stay?' You'll hear the real reasons—missing features, poor support, lack of adoption, or price. Look for patterns across churned customers.
When should I focus on retention vs. acquisition?: If retention is below 80%, fix it first. Acquiring customers into a leaky bucket wastes money. Once retention is healthy, shift focus to acquisition. The best companies balance both—they don't ignore one for the other.

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