What is the typical enterprise software renewal rate?

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JASON LEMKIN

Enterprises generally make 3+ year commitments to new vendors — once they standardize on their chosen vendors.

And if you do a reasonably well job in a large company, generally, you’ll find a way to further penetrate the account. To get more seats, more licenses.

So combine those two factors …

And renewals by “net revenue”, including upsells, additional seats, editions, etc. … is almost always > 100% in true enterprise deals.

Including churn. You will lose some customers. But once they commit for real, and especially if your CSAT/NPS is reasonably high … it’s yours to lose for the next 3 years.

So don’t pat yourself on the back too much for those bigger deals growing, and churning at a lower rate. Because there are no excuses for not achieving negative “net negative churn”, i.e, negative growth as a cohort, in the larger customer segment.

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Published on October 18, 2016
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