This is the total value of contracts renewed and expanded, whether through upsell or cross-sell, minus contract value churned (includes down-sells). It’s the most fundamental business metric in Customer Success, and the most important performance indicator for most CSM teams. The most successful companies will have a Net Renewal Rate above 100%.
Congratulations! Now you have your NRR to benchmark your organization against as you grow in sophistication. Ideally, this number is above 100. Leading organizations have positive Net Retention, but the important thing is to continually improve.
This is the total value of contracts renewed minus contracts churned. The key difference between this number and Net Renewal Rate is that it does not include an expansion element. This metric purely measures your success in retaining existing customers from month-to-month or year-to-year—the closer to 100, the better.
Congratulations! Now you have your GRR to benchmark your organization against as you grow in sophistication. Ideally, this number is above 80. Leading organizations have Gross Retention in the high 90s, but the important thing is to continually improve.
How much are you expanding your existing customer base through upsell and cross-sell year-over-year or month-over-month? As a function of the Cost of Acquisition (CAC), expansion revenue is much cheaper than new revenue, and may be an untapped source of growth for your company.
Congratulations! Now you can benchmark your future expansion against this number.
Logo Retention is the ratio of renewed contracts to the amount of contracts with the potential to be renewed. This metric shows retention in terms of customers lost, instead of revenue lost, making it a key indicator of weaknesses that may otherwise be overlooked. It should be evaluated alongside your Net Renewal Rate for the most balanced view of business health.
Congratulations! You now have a Logo Retention Rate to benchmark against as you improve. An ideal LRR is 100%.
Net Promoter Score (NPS) is a widely-used metric that measures and evaluates customer loyalty. Customers rank their likelihood of recommending your product or service on a scale from one to ten and are sorted into three groups based on their answer: Promoters, Neutral, and Detractors. NPS is a reliable leading indicator of future customer behavior, including renewal, expansion, and advocacy.
Congratulations! You now have an NPS score to benchmark against as you improve. Whether an NPS score is good or bad can vary depending on a variety of factors (survey size, industry, etc.), and 100 is the highest possible score. Don’t forget to reach out to your Promoters to see how you can leverage their willingness to recommend your product.
Cost of Retention shows the amount spent on retention per customer on an annual basis. It’s important to keep in mind that when entering the number of active customers, you should not include customers added in the current year. This metric will be most accurate when calculated with the total number of customers that have been retained during the year. Your results may vary, but in general, you want this number to decrease over time. If you don't have any costs for a category, you can leave the field at zero.
Congratulations! You now know how much it costs to retain a customer. Compare this number to your Cost of Acquiring a Customer (CAC) and benchmark against it to improve.