How to Balance User Retention and User Growth

I've sat on multiple advisory boards. The same optimization mistake happens in every boardroom. Everyone celebrates the growth metrics. User acquisition is up. Revenue is climbing. Market share is expanding. The numbers look great on paper. Then, eventually someone mentions conversion rates are dropping (likely why I was asked to be on the board...). Support tickets are increasing. Users are churning faster. But the boardroom energy stays focused on the growth story. I've seen this pattern at companies across different industries. From my time advising to working with enterprise brands through The Good | Digital Experience Optimization. Leadership teams optimize for business metrics while their users struggle with basic experiences. They measure what matters to shareholders, not what matters to customers. Growth without user satisfaction is borrowed time. When users can't complete basic tasks on your site, those acquisition numbers become expensive churn metrics. Your boardroom dashboard should include user experience data, not just business performance data. Because sustainable growth comes from users who actually succeed with your product. Measure user friction as aggressively as you measure user acquisition.

While traditional SaaS companies are burning budget on AI sales tools and marketing automation, AI-native companies are proving that user retention and word-of-mouth still beat everything else. Here's what caught my attention in Jacco van der Kooij's reverse engineering study of AI-native companies: They're not using AI in their GTM motions. Instead, they're obsessed with what Jacco calls "user reservoirs" - sustainable pools of highly engaged users who stick around and naturally expand usage over time. Think about it. When you hit 98.66% user retention rates, every other metric becomes easier. Your CAC drops because word-of-mouth does the heavy lifting. Your LTV skyrockets because customers never leave. Your growth compounds instead of requiring constant fuel. This insight is pure gold for MicroSaaS builders. While venture-backed companies chase AI-powered growth hacks, the real opportunity is in the fundamentals. Build products users can't live without. Focus on retention over acquisition. Let satisfied customers do your marketing. The smaller your niche, the stronger this effect becomes. In specialized verticals, a truly sticky product creates an impossible-to-replicate moat. Users have nowhere else to go, and they become evangelists by necessity. The irony is beautiful. AI-native companies aren't winning because of their AI tools. They're winning because they've rediscovered what actually drives sustainable SaaS growth. Sometimes the most advanced strategy is going back to basics that actually work. I share more musings on acquiring and operating micro SaaS on Substack >> https://t2m.io/4aDyNCpu For the love of the game 🏴☠️ ⚡️ 𝘐𝘮𝘢𝘨𝘦 𝘤𝘳𝘦𝘥𝘪𝘵: 𝘑𝘢𝘤𝘤𝘰 𝘷𝘢𝘯 𝘥𝘦𝘳 𝘒𝘰𝘰𝘪𝘫 

𝗦𝗮𝗮𝗦 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀: 𝗬𝗼𝘂 𝗗𝗼𝗻’𝘁 𝗡𝗲𝗲𝗱 𝗠𝗼𝗿𝗲 𝗟𝗲𝗮𝗱𝘀 — 𝗬𝗼𝘂 𝗡𝗲𝗲𝗱 𝗮 𝗦𝗺𝗮𝗿𝘁𝗲𝗿 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 𝗚𝗿𝗼𝘄𝘁𝗵 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 Most early-stage SaaS founders think their biggest problem is lead generation. ❌ The truth? You’re burning $50K+/month on customer acquisition — while your best expansion revenue is sitting dormant. 𝗜 𝗷𝘂𝘀𝘁 𝗮𝗻𝗮𝗹𝘆𝘇𝗲𝗱 𝗮 𝗕𝟮𝗕 𝗦𝗮𝗮𝗦 𝘀𝘁𝗮𝗿𝘁𝘂𝗽’𝘀 𝗱𝗮𝘁𝗮: ✅ 23% of their current users were perfect for the premium pricing tier ❌ But they had zero outreach, no upsell strategy, and no customer journey mapping They were hemorrhaging cash chasing new logos while ignoring a goldmine of product-qualified leads in their own user base. 𝗛𝗮𝗿𝗱 𝘁𝗿𝘂𝘁𝗵 𝗦𝗮𝗮𝗦 𝗴𝗿𝗼𝘄𝘁𝗵 𝗲𝘅𝗽𝗲𝗿𝘁𝘀 𝘄𝗼𝗻’𝘁 𝘁𝗲𝗹𝗹 𝘆𝗼𝘂: Your churn isn’t a product problem. It’s a value realization and onboarding problem. Users don’t see ROI fast enough → they churn before understanding your full value. You’re obsessing over new customer acquisition instead of activation and expansion. 𝟯 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗖𝗼𝗮𝗰𝗵𝗶𝗻𝗴 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 𝘁𝗼 𝗥𝗲𝘁𝗵𝗶𝗻𝗸 𝗬𝗼𝘂𝗿 𝗦𝗮𝗮𝗦 𝗚𝗿𝗼𝘄𝘁𝗵 𝗘𝗻𝗴𝗶𝗻𝗲: (1) What would happen to your Customer Acquisition Cost (CAC) if 40% of your Monthly Recurring Revenue (MRR) came from expansion revenue instead of 15%? (2) How many customers reached success in the first 30 days — and what behaviors did they have in common? (3) If you could only add 10 new customers next month, how would you rethink customer retention? 𝗬𝗼𝘂𝗿 𝗦𝗮𝗮𝗦 𝗚𝗿𝗼𝘄𝘁𝗵 𝗕𝗿𝗲𝗮𝗸𝘁𝗵𝗿𝗼𝘂𝗴𝗵: MRR tells you how much you’re earning. It doesn’t tell you why customers stay. Success isn’t just about acquisition. It’s about Customer Success Velocity™ — the pace at which users realize value, adopt critical features, and become high-LTV power users. ✅One SaaS founder I coached discovered a week-one behavior pattern linked to high-value, long-term users. We rebuilt the user onboarding experience around it. Result in 90 days: 📈 47% increase in expansion revenue 📉 34% drop in blended CAC  SaaS Scaling Isn’t About More Traffic — It’s About Fixing the Leaky Bucket. If your growth model is built on acquisition alone, you’re scaling noise — not value. Most SaaS coaches give you tactics. I help you redesign the entire GTM motion to reduce churn, increase LTV, and drive sustainable ARR growth. 💬 Struggling with a similar blind spot? DM me “EXPANSION” and let’s identify what’s really slowing down your SaaS scaling efforts. ✅ One powerful insight could save you months of trial-and-error and tens of thousands in wasted ad spend. #SaaS #SaaSFounders #SaaSScaling #StartupScaling #SaaSCoach #RevenueGrowth #ProductMarketFit #CustomerSuccess #ARR #SaaSMarketing #StartupGrowth #SaaSPlaybook