How to Identify Retention Issues in Sales Data

Something I never really thought of evaluating until we did over $100M... Tracking the retention rate of each salesperson.... This helps me understand what salespeople setup deals for long-term success vs. short term commission. Here are the 3 top retention KPIs I'm working on tracking per rep that you can use to your advantage: 1. Net Revenue Retention (NRR) This metric provides a comprehensive view of the revenue impact of an AE's deals, including expansions and churn. It shows whether their customers are growing with you or shrinking over time. Key Insights: - AEs closing high-NRR deals are selling to the right-fit customers with growth potential. - Highlights which AEs drive long-term account value through upsells and renewals. Customer Churn Rate Churn directly reflects the health of customer relationships and whether the AE set proper expectations during the sales process. It’s simple and highly actionable. Key Insights: - High churn rates signal that AEs may be closing poor-fit deals or overpromising. - Helps focus coaching efforts on improving deal qualification and expectation-setting. First-Year Retention Rate The first year is critical for customer success and retention, often reflecting how well the AE positioned the solution to meet customer needs during the sales process. Key Insights: - A low first-year retention rate suggests misalignment in the initial sales process or poor onboarding handoff. - Pinpoints which AEs are delivering deals that are most likely to stick around. Think about you can evaluate and track retention rates of new customers per rep. Any other data you'd want to track to scale your success? LMK below.

We had churn hiding in our high NRR. No one suspected we had a problem. We were crushing our Net Revenue Retention (NRR) targets. Expansion was strong. Customers were increasing usage. Leadership was happy. On paper, everything looked great. But there was something lurking in the data—logo churn. At one of my past companies, we operated on a consumption-based model, and our large customers were growing exponentially. That growth masked a serious issue—we were bleeding smaller customers at an alarming rate. Our Gross Revenue Retention (GRR) was telling a different story, but no one was looking at it because we were too focused on celebrating our NRR success. By the time we realized what was happening, an entire segment of customers had churned before they ever had a chance to grow. We were replacing lost customers with bigger expansions, but let’s be clear: that is not a sustainable business strategy. Lesson learned: You can’t let a strong NRR distract you from the full picture. So, what should you be paying attention to? ✅ GRR (Gross Revenue Retention) – Are you actually keeping customers? A strong GRR means you have a solid foundation. If it’s low, you have a churn issue—or a downsell issue. ✅ NRR (Net Revenue Retention) – Expansion is great, but if it’s masking logo churn, dig deeper. ✅ Logo Retention – Are you retaining the right customers? If a segment is consistently churning, there’s a deeper problem to address. ✅ CAC Payback Period – Are you making money on your customers, or are they churning before you even see a profit? ✅ Understand how you’re achieving your NRR. Is it GRR? Expansion? Upsell? Cross-sell? Churn? Downsell? Revenue increases? NRR is an outcome, not a strategy—know what’s driving it. Key Takeaway: Retention is a house of cards if it’s built only on expansion. NRR growth is meaningless if your GRR is crumbling. _____________________________ 📣 If you liked my post, you’ll love my newsletter. Every week I share learnings, advice and strategies from my experience going from CSM to CCO. Join 12k+ subscribers of The Journey and turn insights into action. Sign up on my profile.

One thing I've noticed when working with clients and doing discovery calls is that a lot of companies are not using customer signals to be proactive instead of reactive. Being proactive rather than reactive is the key to ensuring customer satisfaction and retention. One effective strategy to stay ahead of potential issues is by documenting and understanding "customer signals" – subtle behaviors and indicators that can serve as red flags. Recognizing these signals across the organization allows businesses to engage with customers at the right moment, preventing issues from escalating and ultimately fostering a more positive customer experience. Teams should not just try to save the account once there is a request to cancel or an escalation. You need to pay attention to the signs before you hit this point. Ensuring the entire team knows what to look for means that everyone is empowered to care and improve the customer experience. Here's a list of customer behaviors that could be potential red flags, gradually increasing as they check out or consider leaving: 🔷 Reduced Engagement: Decreased interactions with your product or service. Limited participation in surveys, webinars, or other engagement opportunities. 🔷 Decreased Usage Patterns: A decline in frequency or duration of product usage. Reduced utilization of features or services. 🔷 Unresolved Support Tickets: Multiple open support tickets that remain unresolved. Frequent escalations or dissatisfaction with support responses. 🔷 Negative Feedback or Reviews: Public expression of dissatisfaction on review platforms or social media. Consistently low scores in customer feedback surveys. 🔷 Inactive Account Behavior: Extended periods of inactivity in their account. No logins or interactions over an extended timeframe. 🔷 Communication Breakdown: Ignoring or not responding to communication attempts. Lack of response to personalized outreach or engagement efforts. 🔷 Changes in Buying Patterns: Drastic reduction in purchase frequency or order size. Shifting to lower-tier plans or downgrading services. 🔷 Exploration of Alternatives: Visiting competitor websites or exploring alternative solutions. Engaging in product comparisons and evaluations. 🔷 Billing and Payment Issues: Frequent delays or issues with payments. Unusual changes in billing patterns.

I’ve been watching more deals fall apart in diligence… And churn is often the quiet killer. Not CAC. Not growth rate. Not even revenue quality. Just simple, unignorable customer churn. And it makes sense. In 2025, new levers are fueling cheaper growth — obviously this is stage, operating model, and sector dependent — but AI is disintermediating much of the legacy outbound motion. Which means retention is increasing in prevalence as a signal. Buyers are increasingly asking: “Is this thing durable?” But the way most companies talk about retention obfuscates the full story… – “We’re at 85% gross retention” – “We’ve got 110% NRR” – “Our churn is mostly concentrated in our smallest accounts” This all sounds okay, until it gets unpacked during diligence. Here’s what triggers buyer drop off: 1/ Churn in high ACV accounts. It doesn’t matter if the total churn rate is low… if the wrong customers are churning, it’s a red flag. Buyers want evidence of expansion opportunity. 2/ No clarity on why churn is happening. “It’s macro” is not an acceptable answer. Smart buyers want to know: – Was the product not sticky? – Was onboarding broken? – Did the ICP shift and no one updated the GTM motion? 3/ Weak feedback loops between churn data and product. If you’re losing customers and not changing anything? That’s not a retention problem. That’s an operating model problem. 4/ No go forward plan to fix it. Buyers don’t need everything to be perfect. But they do need a playbook to underwrite. – What are you testing? – What early signals are working? – What’s the resourced plan to close the gaps? From what I’m observing, the companies that are winning are building retention into the product + GTM motion, not just punting it to CS. They realize that they need to proactively reduce friction before it turns into churn. They track early usage signals like they are revenue. They obsess about product until it’s too painful, sticky, or costly to churn from. And this is where I’m open to being wrong: Maybe the next wave of acquirers won’t care as much. Maybe they’ll go back to revenue growth obsession and index on topline again. The decision calculus is different for public co's (it's growth first)… But for the private companies building salable businesses… I doubt it. Retention is becoming the new currency of enterprise value. If you’re prepping for a process and haven’t done a churn deep dive yet, start now.

In the last 12 months, Rev has increased our close rates by 300% and shortened our average deal cycle from 100 days to 40. Here's the 3-step playbook we used to increase sales velocity (without adding headcount): BACKGROUND Since 2021, sales benchmarks in SaaS have trending down: - Win rates have dropped 18% - Deal sizes have shrunk 21% - Deal cycles are 16% longer We’re all working harder and longer in every deal for less money! Unfortunately, this environment is here to stay. So what’s a Sales Leader to do to generate velocity in this market? At Rev, we follow a process that I call “SLC” - for “Stalled, Lost, or Churned.” Here's how it works: 1. Convene a SWAT team of your GTM leaders (Head of Sales, RevOps, Marketing, etc). It all starts here. Without getting the right people in place who can impact change across the org, nothing matters. The team is going to meet daily at first to generate a new and valuable report (see #2); then they will divide and conquer to resolve the issues slowing down your GTM. 2. Generate your Stalled-Lost-Churned Report The key insight here is that a standard “closed-lost” report isn’t going to cut it. Instead, you’re going to create a new report of every deal that closed-lost, but also any customer that churned and any deal that “stalled” (i.e. where there hasn’t been a positive change of close-% within three weeks). 3. Map your sales cycle and attach to each step exactly HOW MANY and WHY deals stalled-lost-churned. The WHY is the hardest part — the simple answers in Salesforce will not be good enough. You need to scrub the heck out of the opportunity list to dig deep and figure out real “why” answers. For example:  “Customer went dark” is not a good enough reason. What was really happening in the deal when the customer stopped responding? Were they not impressed enough by the demo? Missing a key feature? Scared off by pricing? Did a key persona refuse to engage or fail to see value? Talk to your AEs and listen to more Gong calls. The answers are there. You just have to find them. 4. Assign each of the WHYs to a member of the GTM team and work through a meaningful improvement Are we missing a slide that speaks to a key persona? Mishandling a certain objection in the sales cycle? Is our order form sitting in procurement too long? Each SLC issue gets assigned to an owner and worked until it no longer slows deals down. Here’s an example: One “SLC issue” we found at my past company NetBase was that our order form was being sent to legal review by our customer 90% of the time. So we removed the legalese from the order form and referenced online terms and conditions with a URL. The result was our buyers only sent the form to legal 10% of the time! That was a savings of 2-3 weeks on 80% of deals! TAKEAWAY Want to improve sales velocity? Find out the real reason WHY deals aren't closing. Not just why you LOST deals. But why deals stalled and churned. Use SLC.

Took a long time for me to understand how to actually think about churn correctly. Here's 3 of the biggest lessons I've learned: 1. Avoid Assuming Causes without Direct Evidence: When observing that a specific percentage of churn, say 15%, stems from the startup segment, it's crucial to recognize this as a fact rather than a reason as for why the churn occurred. The only way to know is to directly confirm it. Instead of guessing, directly asking churned customers through surveys or interviews will provide clearer reasons for why they left. 2. Analyze Churn Relative to Customer Base Composition: If 20% of your ARR comes from enterprise-level companies, then seeing a similar proportion of churn from this segment might be ok. But if enterprises constitute 50% of your ARR and only 20% of churn, that's actually pretty good! Effective churn analysis needs you to compare churn rates to the overall business composition from both current and former customers. 3. Understand True Causation: High churn rates in specific sectors or demographics might not always stem from product-market misfit. So if 30% of churn occurs in the financial services sector doesn’t necessarily mean your product lacks needed features. External factors, like economic downturns could be impacting that sector. So you have to consider broader market dynamics to truly understand the actual causes. So again, if your churn analysis is just tallying up lost customers, don't do that anymore. You have to get a more nuanced understanding about who is leaving, why, and how their departures compare to the overall makeup of your customer base. Along with clarifying the dynamics of customer retention it will also make your strategic planning for addressing churn more effective.

As a 5x CEO with 30+ years running tech companies, I’ve seen it time and again: most B2B SaaS companies can’t answer basic GTM questions. If you want an efficient GTM motion, there are 2 things you need to know: CAC (cost to acquire customers/revenue) Retention (ability to retain customers/revenue) Without knowing those COLD, you can’t get an accurate financial picture of your business. CASE STUDY Last week, I spoke with Aaron Levine, CFO of Prophix, about a PE-backed company we’d worked with. This company was struggling to track renewals. Their CRM data was not connected to their Salesforce and Intacct systems, meaning there was zero connection between their financial and customer data. They couldn’t even tell when a customer was up for renewal. Imagine going into a board meeting and someone asks when your 10 biggest accounts are up for renewal—and you have no idea. Not a good look. But it happens all the time. So why do so many SaaS companies struggle with something so simple? The issue is that most don’t have clean, full-funnel data that’s comprehensive enough to answer with any level of confidence. RESULT Once Aaron and his team cleaned up the CRM data, they could quickly identify when customers were up for renewal—no more embarrassing board meetings. They also identified underperforming segments—they had over-indexed on SMB, which wasn’t converting, and could reallocate budget to a high-performing segment. None of this would have been possible without first connecting the dots between CAC and customer retention. If you don’t know your customers’ renewals dates, you don’t have visibility into your cashflow. And if you don’t have a strategy for retaining and upselling clients, you’re leaving revenue on the table. Full visibility of your funnel is mission-critical for SaaS companies in today’s marketplace.