Retention is a lynchpin of subscription businesses. In today’s climate, renewals are more important than ever. Particularly when new contracts are harder to land, businesses will maximize growth and cash collections by keeping as many as possible of their existing contracts. Successful ScaleUp companies that focus on retention and customer success processes are not only well positioned for the current climate but also are building long-term value.
In Insight Partners’ portfolio, our high retention businesses have an enviable head start in hitting targets and weathering downturns, and over time scale using far less sales & marketing investment. These businesses spend less to replace lost revenue (or plug the leaky holes in the bucket) and can efficiently capture incremental revenue by delivering more value to current customers. Simply put, all else equal, high retention businesses are (1) larger, with (2) higher growth rates, and (3) higher margin profiles. All three – size, growth, and margin – drive long-term value.
Want to know what a retention uplift is worth to your business in 5 Years? Plug in your numbers and run your own scenarios below using Insight’s Customer Success ROI calculator. We will tell you what a 1% increase in net retention equals in incremental enterprise value in 5 years.
1 Self-reported figures from S-1 and earnings call