Frequent readers know I enjoy using similes, so I won’t disappoint:
SaaS companies are like leaky rowboats. If retention rates aren’t strong enough to overcome customer churn, they’ll take on water until they sink to the bottom.
Sid Jain, a senior analyst with ChartMogul, researched 2,100 companies and found that “more than half of SaaS businesses had lower retention in 2022 when compared to 2021.”
In this detailed breakdown, he compares net revenue retention rates by ARR range and identifies benchmarks for companies that have yet to reach product-market fit.
“What is considered a good net retention rate differs by the stage of your business,” advises Jain. “When benchmarking, always keep the stage of your business in mind.”
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