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    © 2022 The Saas Academy

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    Maneesh

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    © All Rights Reserved
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    © 2022 The Saas Academy

    Uploaded by

    Maneesh
    75 views20 pages

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    Copyright:

    © All Rights Reserved
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    75 views20 pages

    © 2022 The Saas Academy

    Uploaded by

    Maneesh

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 20

    The SaaS Academy SLIDE : 1

    The SaaS
    Academy
    © 2022 The SaaS Academy
    TheSaaSAcademy.com
    The SaaS Academy SLIDE : 2
    The SaaS Academy SLIDE : 3
    The SaaS Academy SLIDE : 4

    Am I misled by my
    aggregate churn
    numbers?
    The SaaS Academy SLIDE : 5

    Is retention trending in
    the right direction?
    Any early warning
    signs?
    The SaaS Academy SLIDE : 6
    The SaaS Academy SLIDE : 7

    RENEWAL RATE

    METRIC TYPE: recurring revenue health metric


    MEASURES: retention for only one month’s of invoicing
    WHO: Leadership, CSM, account mgmt, finance
    The SaaS Academy SLIDE : 8

    The Concept!

    When I email one hundred invoices


    for Jan-XX renewals, I track…

    1) who paid their invoice


    2) who churned

    …against the same Jan-XX cohort.


    The SaaS Academy SLIDE : 9

    It Is Not!

    Aggregate churn or
    retention.

    We do not compare renewed


    customers against our total
    customer count.
    The SaaS Academy SLIDE : 10

    Misled?

    In periods of high customer growth…

    aggregate retention can be


    misleading.
    The SaaS Academy SLIDE : 11

    THE
    MATH
    The SaaS Academy SLIDE : 12

    • LOGO EXAMPLE
    • Invoiced 100 customers in LOGO RENEWAL RATE
    Jan-XX
    • 95 customers renewed, 5 95 Jan Customers Renewed
    churned
    • = 95% renewal rate for 100 Total Jan Invoiced
    only the month of Jan
    • Measure every month
    = 95% Renewal Rate
    The SaaS Academy SLIDE : 13

    • $$$ EXAMPLE
    • Invoiced 100 customers in $$$ RENEWAL RATE
    Jan-XX worth $100K ARR
    • $97K of ARR renewed, $3K $97K Jan ARR Renewed
    churned
    • = 97% $$$ renewal rate for $100K Jan ARR Invoiced
    only the month of Jan
    • We should measure every
    month = 97% Dollar Renewal Rate
    The SaaS Academy SLIDE : 14

    LOGO
    VS.
    DOLLAR
    The SaaS Academy SLIDE : 15

    LOGO VS DOLLAR?

    Losing lower ASP


    customers

    Losing higher ASP


    customers
    The SaaS Academy SLIDE : 16

    Important Notes

    NOTES Multi-year Contracts


    The SaaS Academy SLIDE : 17

    Multi-year Contracts

    Multi-year contracts make a big a


    difference in the calculation of your
    renewal/retention/churn rates.
    The SaaS Academy SLIDE : 18

    In Contract vs. Out of Contract


    The SaaS Academy SLIDE : 19

    SUMMARY
    • Retention on a cohort basis
    • More of a leading indicator
    • Detect early trends
    • Aggregate retention can be
    misleading depending on the growth
    of the company
    • Great data for CSM and AM teams
    • Prepare for renewal discussions
    The SaaS Academy SLIDE : 20

    To learn more…
    TheSaaSAcademy.com
    TheSaaSCFO.com
    TheSaaSNews.com
    Follow on Twitter…
    @TheSaaSAcademy
    THANK YOU! @TheSaaSCFO
    @TheSaaSNews

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