Steven Forth’s Post

There has been a lot of doom and gloom about trends in Net Revenue Retention. But there are still some companies driving extraordinary performance. We look at one example from the open PeakSpan Capital Ibbaka Survey on Net Revenue Retention in 2024. What is surprising here is that this company has both high churn and high NRR. Can you guess which SaaS vertical it is in? https://lnkd.in/gZ9hauYS #NRR #NDR #SaaS #pricing #GenAI #generativeAI #churn

While there has been a lot of discussion around declining NRR trends in the #SaaS industry, some companies are still driving outstanding NRR performance. As highlighted in our recent blog, Snowflake maintained an impressive 128% NRR in Q1 FY2025, despite a drop from its previous high of 158%. To unlock the secrets behind such stellar NRR achievements, Steven Forth will join Saurabh Agrawal from Zenskar for a webinar next week on "How Far Ahead Usage-Based Pricing Can Take Your NRR?". Sign up for the webinar here 👉 https://bit.ly/3KQGNh5 We'll dive into early insights from our #NRR survey and explore how usage-based pricing models can enhance revenue retention. Don't miss this opportunity to gain valuable strategies for maximizing your NRR through intelligent pricing. https://lnkd.in/gQfj4cEN #saas #nrr #netrevenueretention #usagebasedpricing #revenueretention #snowflake #pricing #pricingmodels #pricingstrategy #webinar #saasmetrics #saasfinance #saasrevenue #subscriptionbusiness #subscriptioneconomy #subscriptionpricing #recurringrevenue #customerretention #expansionrevenue #growthstrategies #revenueoptimization #revenuemanagement #customervalue #valuemetrics #productled #productledgrowth

I'm thrilled to share that I had the opportunity to contribute to the SaaS Growth Report 2023 by ChartMogul. It's always a privilege to be part of research that dives deep into the SaaS world. Three Key Takeaways from the Report: 1️⃣ Companies with stellar retention rates grow at least 2.3x faster than their counterparts. In a market where acquiring a new customer can be several times more expensive than retaining an existing one, this insight underscores the importance of customer satisfaction and loyalty. 2️⃣ As SaaS companies scale, there's a noticeable shift towards annual billing. Companies in the $15-30M ARR bracket source 41% of their ARR from plans that are 12 months or longer. This shift not only provides better cash flow but also locks in customers, potentially reducing churn. 3️⃣ As ARR scales, so does the reliance on expansion revenue. For SaaS businesses in the $15-30M ARR bracket, a significant 36% of their added revenue stems from expansion. Upselling and cross-selling become pivotal at this stage; missing out on these opportunities means leaving substantial growth on the table. I invite everyone to delve into the report and gain deeper insights into the growth trends and benchmarks of the SaaS industry. A huge shoutout to the ChartMogul team and all the contributors for making this report possible! Go check out the report: https://lnkd.in/eQHm5Hm2 #SaaS #Growth #Research #ChartMogul

The median Net Revenue Retention (NRR) for the software universe has been steadily declining the last few quarters. More pressure on churn (as companies look to reduce point solutions in favor of platforms) and more difficult upsells have pushed net retention down... #saas #saasmetrics #nrr #revenueretention #cs #customerretention #churn #customerchurn #upselling #crossseling #churnrate #saasbenchmarks

The PeakSpan Capital - Ibbaka survey on NRR performance uses the six NRR factors to get deeper insights than is possible with a more generic approach. You have to understand how much each of the factors is impacting NRR in order to put together an effective strategy. https://lnkd.in/gRnms5Yz #pricing #SaaS #NRR #NDR #netrevenueretention #saasmetrics

Is recurring revenue overrated? In a thought-provoking article, Nora Tandberg, CFO at Verdane-backed Papirfly and content contributor to SaaSiest challenges the conventional wisdom surrounding recurring revenue percentage ("RR%"). She argues that focusing solely on maximizing RR% may not be the ultimate path to success for SaaS companies. Key messages from Nora: 1️⃣ High service revenue doesn't always indicate product gaps. It could be a sign of customer-centricity and strategic upselling opportunities. 2️⃣ Services play a pivotal role in driving adoption, customer retention, and overall revenue growth. 3️⃣ Striking the right balance between product excellence and service offerings is key to sustained growth and profitability. Read the full article here ➡️ https://lnkd.in/emFttqcS and comment below to join the discussion! #SaaSNordic #SaaSiest #SaaSInsights #RecurringRevenue #CustomerSuccess #ProductStrategy SaaS Nordic

How did Net Revenue Retention (NRR) hold-up in 2023? We are finalizing the analysis of the data from 1,500+ private SaaS companies and the answer is as expected...not great A few additional insights below: Public cloud company NRR decreased from ~ 120% at median at the beginning of 2023 to ~ 110% today Private SaaS company NRR decreased from ~ 105% at median in 2022 to ~100% in 2023 At the same time top line revenue growth rates decreased from a median of ~ 20% in 2022 to ~ 15% in 2023 and ~ 11.4% 2024 Y-T-D (public SaaS companies) Upon detailed quarterly inspection the growth rate story is more instructive: - Growth rate was 24.8% in Q1-22 (median - public SaaS companies) - Growth rate was 17.2% in Q1-23 (median - public SaaS companies) - Growth rate was 11.4% in Q1-24 (median - public SaaS companies) At the same time - CAC Ratio for New Customer Acquisition was up again in 2023 Often macro issues - such as the maturing of the SaaS industry, the work-out of market saturation due to ZIRP era over capitalization of companies and technology buyer/buying maturation are hard to over come in the short term I would love to host anyone on the Metrics that Measure Up podcast who increased NRR in 2023 to share the strategies, tactics and best practices they used to buck the NRR downward trend DM me with any recommendation and we will book their appearance ASAP and/or share your strategy for success below! #b2bsaas #metrics #benchmarks

NRR across the top 20 public SaaS companies reduced by ~8% in Q4'23 as compared to Q4'22. In the environment where it is difficult to acquire new customers due to frozen budgets and tough ROI evaluations, it becomes even more important for companies to retain their existing customers. However, significant NRR reduction across public companies will definitely trickle down to SMBs and mid market companies. It thus, becomes essential for companies to keep a close track on their NRR across cohorts and dimensions and take actions proactively on potential churn or downgrade customers. We at Mantys (YC W23) help companies get real-time visibility of their cohorts and enable them to slice and dice them by different dimensions. Source: BenchSights and conversation with Gaurav Dixit

This report from the folks at Vendr made a lot of waves (in a good way) when it came out in Q1 and appeared in my feed. The Q2 report is also quite insightful, especially the ACV graph. If I might make a request, it would be exceptionally powerful if the creators were to make this a motion graph / bubble chart so that we could see the values change over time. Pretty please? ;-) #vendr #SaaS #product #ACV #analysis #data #insights

𝗦𝗮𝗮𝗦 𝗖𝗵𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗪𝗲𝗲𝗸 How much ARR comes from annual plans? 💵 As companies scale, the proportion of revenue coming from annual plans increases. Companies with ARR in the range of $15-30M get 41% of their ARR from plans 12 months or longer. For companies just starting out (<$300K ARR) that number is 28%. 💵 B2C companies get almost half of their revenues from annual plans (chart in the full report). This is because of two reasons: i) Churn is usually higher for B2C companies, hence companies want to lock in customers on annual plans, and ii) Payments are optimized better on annual plans. Source: ChartMogul SaaS Growth Report #SaaS #Data #Payments