Glossary
Net revenue retention
Net revenue retention measures what happened to the money you already had, comparing revenue from existing customers now against a year ago. Upgrades, downgrades and cancellations all count; revenue from new customers does not. Above one hundred percent means the base grew on its own, and that is what subscription businesses are watching for.
01
What net revenue retention says that churn does not
Not a weekly row. It is a monthly or quarterly figure for a leadership review, because a single week of upgrades tells you nothing at all. The weekly rows that feed it are the account management ones: reviews held with existing customers, expansion conversations opened, renewals falling due inside ninety days that somebody has contacted.
Retention decides whether growth compounds or leaks. A business at a hundred and ten percent grows without selling anything new, and one at eighty-five has to replace a seventh of itself every year before it starts. The gaming version is cohort selection: leave out the accounts that churned in their first months and the figure improves on paper.
Worked example: A workflow software company reported ninety-four percent retention and assumed it was fine, because raw churn looked low. Splitting by account size showed customers under twenty seats retaining at seventy-eight percent and larger ones at a hundred and nine. They stopped buying paid traffic for the small segment and moved the money into onboarding.
Sources: klipfolio.com/kpis/saas; kpi.org/kpi-basics/dashboarding-and-analysis
Churn rate
Churn rate is the share of customers, or of recurring revenue, that goes away in a period: customers lost divided by customers at the start of it.
02Cohort
A cohort is a group of customers or employees who started in the same period, tracked together over time so you can compare January's signups with June's.
03Customer lifetime value
Customer lifetime value estimates the gross profit a customer produces before leaving, usually average revenue times gross margin divided by churn.
04KPI examples by department: sales, ops, finance, HR
Concrete KPI examples for each department in a small company, tagged leading or lagging and weekly or monthly, to help you build a Scorecard that works.
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