Dear SaaStr: We’re at $13m ARR and Still Growing — But Our GRR is Slipping, Down to 88%. What Should We Do?
First off, congrats on hitting $13M ARR and 1,000 clients—that’s no small feat. But yeah, 88% GRR is a red flag, especially at your scale. If your CEO instincts are telling you it’s going south, you’re probably right.
Here’s what I’d do tomorrow morning:
1. Segment Your Churn Data Immediately
Too many don’t do this. Break down churn by customer segment, use case, and ACV. Are SMBs churning faster than mid-market? Is churn concentrated in a specific vertical? You need to know where the problem is coming from. Often, churn is disproportionately high in one segment, and fixing that can stabilize the whole business. More here.
2. Talk to Your Happy Customers. More of Them.
Find your happiest customers—the ones renewing and expanding—and dig into why they’re staying. What value are they getting? What features are they using most? This will give you a blueprint for what’s working and what you need to double down on.
3. Fix and Upgrade Onboarding and Activation
If churn is happening early in the customer lifecycle, your onboarding process might be broken. Make sure every customer is fully onboarded and seeing value within 30 days. If they don’t activate quickly, they’re already halfway out the door.
4. Deploy a Customer Success Blitz
Your Customer Success team needs to go into overdrive. Start doing 30-60-90 day check-ins with every customer, especially the ones at risk. If you don’t have enough CSMs to cover all 1,000 clients, prioritize the top 40% by revenue.
5. Upsell and Expand
Focus on driving NRR (Net Revenue Retention) by upselling to your existing customer base. Can you add a team or enterprise edition? Can you sell more seats, features, or usage? Expansion revenue can offset churn and stabilize your growth. And will show you the way to adding more value to your customers.
6. Diagnose Product Gaps. This Is Core to The Issue.
If churn is tied to product issues, you need to address them now. Talk to your Product team and get those gaps on the roadmap. If you’re losing customers to competitors, figure out why and close the gap. Too many aren’t honest enough here.
7. Visit Customers in Person
This always works. Go visit your top customers in person, do it. Customers who feel a personal connection to your team are much less likely to churn.
8. Reassess Your ICP (Ideal Customer Profile)
If churn is high because you’ve expanded into the wrong segments, it’s time to refocus. Double down on the customers where you have a clear 2x advantage and pull back from segments that aren’t working.
9. Track Leading Indicators
Start monitoring leading indicators of churn, like product usage, NPS, and support tickets. If you can predict churn before it happens, you can intervene early and save those accounts.
10. Be Brutally Honest. Don’t Hide. There is Still Time.
If your GRR is slipping, you might be losing some product-market fit in certain segments. That’s okay—it happens. But you need to acknowledge it and take action. If you had product-market fit once, you can get it back by listening to your customers and building what they need.
The key is to act fast. Churn is like a leaky bucket—it only gets worse if you don’t fix it. Start with the data, focus on your happiest customers, and get your Customer Success team fully engaged. You’ve got this.
More here:
