What should the agenda be for a startup with $900K annual revenue, 50 customers, and 60% renewal?

80% renewal for this year.

You can set the appropriate ARR goal for the year, etc. But a 60% renewal rate will drag you down like a ball-and-chain over time. 40% of the customers you’ve worked so hard to close … evaporate the next year from the ARR “base”.

My learnings are that each quarter, and each year, you should set a core goal, a core KPI to decrease churn and increase net revenue from the customer base.

And incent it. Pay bonuses tied to achieving the quarterly and annual improvements.

And discuss it. At every company meeting.

Then, magic usually happens. Not overnight. But in just a quarter or two, you should see improvement.

In part, because everyone a start-up, not just customer success, can contribute in some small way to customer happiness and retention. Closing a feature gap, fewer bugs, better support, better post-sales marketing, a user summit, a salesteam that doesn’t overpromise too much, etc. Every functional area, every employee, can contribute here.

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Published on May 10, 2017

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