Nick Mehta is the CEO of Gainsight, the customer success platform that helps businesses deliver value to customers and drive scalable growth.
Over the past 12 years, Nick has met with more than 5,000 companies and hundreds of investors, becoming one of the foremost authorities on customer success strategies.
10 Key Investor Questions on Customer Success You Must Be Ready For:
- Net Retention Rate (NRR) – Your total ARR from existing customers today versus one year ago, with top quartile SaaS companies hitting 120%+ and average companies seeing 3+ point declines in recent years
- Gross Retention Rate (GRR) – The “floor” of your business showing what percentage of revenue is retained before upsells (the metric experienced investors care about most)
- Early Warning Indicators – Leading metrics that predict churn before it happens, particularly critical for early-stage companies without renewal history
- Product Stickiness Metrics – Quantitative evidence showing users can’t live without your product (DAU/MAU ratios, cohort usage persistence, adoption of sticky features)
- Customer Success Processes – Your methodical approach to the customer journey from onboarding through advocacy, scaled appropriately to company stage
- Value Demonstration Framework – How you quantify and communicate ROI to customers, creating a closed-loop system of measurable value
- Customer Advocacy Strategy – Your process for identifying and nurturing “pound the table” references who articulate transformative outcomes
- Cost Structure & Efficiency – Customer Success spend as percentage of ARR, portfolio size per CSM, and strategies for scaling beyond linear headcount
- AI Implementation Roadmap – Specific applications of AI that augment human CS teams, eliminate surprises, and drive efficiency
- ROI Measurement Methodology – Your approach to capturing outcome data, especially for outcomes that occur outside your product’s data visibility
Here’s what investors are really looking for:
1. Net Revenue Retention (NRR) – The North Star Metric That Still Matters
While some call it a vanity metric, NRR remains the single most important customer success metric investors examine. The math is simple: take what your existing customers spent last year and compare it to what they’re spending this year. If they spent $100 last year and $102 this year, that’s 102% net retention.
What we’re seeing today:
- Average NRR varies significantly by company size
- Smaller companies typically show lower NRR
- Most concerning: NRR is down 3 points year-over-year across the board
- Some startups are seeing 10-20 point drops in NRR
2. Gross Revenue Retention (GRR) – The Truth Behind the Numbers
Here’s what many founders miss: while everyone talks about NRR, sophisticated investors are increasingly focused on GRR. Why? Because it strips away the makeup of upsells and expansion revenue to show the true health of your customer base.
The benchmarks that matter:
- SMB businesses: 75-85% GRR
- Enterprise-focused companies: 85-92% GRR
- Systems of record: 95%+ GRR
- The gold standard: ServiceNow at nearly 100% GRR
3. Early Warning Systems – What Happens Before Churn
Modern investors don’t just want to see your retention numbers – they want to understand how you predict and prevent churn before it happens. While NPS scores are common, they’re often not enough, especially for smaller companies with limited data.
Instead, focus on:
- The DEAR Framework: Deployment, Engagement, Adoption, and ROI
- AI-powered sentiment analysis of customer communications
- Usage patterns that correlate with long-term retention
- Custom early warning systems based on your product’s specific metrics
4. Product Stickiness – Beyond Basic Usage Stats
The holy grail of SaaS is building a product your customers can’t live without. Here’s how to prove it to investors:
- Track DAU/MAU ratios over time
- Map usage cohorts to show sustained engagement
- Identify and track your “sticky features” – the ones that correlate with higher retention
- Example: Gainsight found that users of their Journey Orchestrator feature show 100% higher net retention
5. Operational Efficiency – The New Focus for 2025
In today’s market, investors care deeply about how efficiently you deliver customer success. Key metrics to track:
- Customer Success cost as a percentage of ARR
- Revenue managed per CSM
- AI-powered efficiency gains
- Digital scale initiatives that don’t require additional headcount
6. Building Your Army of Customer Advocates
Investors will call your references—and they can spot manufactured enthusiasm from genuine advocacy.
“There’s a world of difference between a satisfied customer and a true advocate,” emphasizes Mehta. “Advocates pound the table for you because you’ve fundamentally transformed their business or career.”
The most powerful advocates:
- Have achieved significant, measurable ROI
- Can articulate specific value in business terms
- Actively use your product (not just the person who signed)
- Maintain strong relationships with your team
- Are willing to take texts/calls from investors
“A weak reference can poison your entire fundraising process,” warns Mehta. “It’s better to have no reference than one who delivers lukewarm endorsement.”
7. The Economics of Customer Success
Investors analyze the efficiency of your customer success function, benchmarking your metrics against companies at similar stages:
“They’ll calculate CS spend as a percentage of ARR and correlate it with net retention to assess ROI,” explains Mehta. “They’ll also examine portfolio loads—how much ARR each CSM manages, and how many accounts they support.”
Benchmark data shows wide variations:
- Early-stage: 8-12% of ARR spent on CS, managing $1-2M ARR per CSM
- Growth-stage: 5-8% of ARR spent on CS, managing $2-4M ARR per CSM
- Scale-stage: 3-5% of ARR spent on CS, managing $4M+ ARR per CSM
“The most impressive companies demonstrate a strategy for scaling customer success without linear headcount growth,” notes Mehta. “This means thoughtful segmentation, digital-led approaches for smaller customers, and operational excellence.”
The Bottom Line
The bar for customer success metrics has never been higher. But here’s the good news: you don’t need to be perfect on all these dimensions. What investors really want to see is:
- That you understand these metrics deeply
- That you have systems in place to measure them
- That you have a clear strategy for improving them
- That you can demonstrate consistent progress
Remember: building a great SaaS company is a marathon, not a sprint. Focus on getting a little better every day, and make sure you can tell that story convincingly to investors.
And as we learned climbing Kilimanjaro – take it “po po” (slowly, one step at a time). Just keep moving forward.
And 300+ of the top CCOs in B2B will be at the 2nd Annual SaaStr CCO Summit at SaaStr Annual on May 14:
