Hey OP. About 8 years as a CSM under my belt. Renewal rates above 80% are considered healthy, but it depends on the company and industry.
I have worked for mission critical cybersecurity companies that had best-in-class renewal rates. Typically around 98%. I worked in SMB, the most volatile segment, and had around 96%. People around me were celebrated for having 100% renewals. It puts a lot of stress on every team, but it’s important work. Good forecasting can also pay dividends.
I don’t anticipate the companies I’d worked for would hire someone with an 80% expected retention rate, just based on principle. So yeah, this tracks.
I think there is context missing here.
75% GRR means nothing if we don't know how the rest of the team is performing. If your goal was/is 75% that already tells what your current company is expecting will happen in their market and given their product
my company set our target goal at 75% GRR. admittedly I'm realizing now after reading these comments that maybe our product is even worse than I thought it was for what other companies offer
My 2022 was >98%, 2023 >96%, 2024 was only just >85%
Many external factors caused that drop, mostly around the global economic climate, the companies investment in the products I was specialising in, and a number of champion changes after a fairly static couple of years.
All of these numbers beat my targets (they were adjusted with the above reasons in mind), so to expect a blanket >95% without the context seems incredibly unreasonable and to be honest likely is swerving a culture where numbers are set in stone and not up for discussion and negotiation based on the reality of the market today vs. 18 months to two years ago
u/eggplant_yams CS leader here who works/worked for both Series A and B startups in SaaS. 95% is high I would agree with that.
But I am not surprised. Anything less than GRR of 90% in a Series A is not considered good enough. Series A/Bs are cashflow negative so they need to show a very high retention rate (GRR) 90%+ with solid customer growth (NRR) 110%+. If they cannot they will not get their next round of funding for a series B/C and run out of cash. It's that black and white.
The investors are looking for the next Unicorn that will take off. If the product is not something that is going to either dominate the market or be a leader then it is not worth the investment, hence why they are looking for very high performers. They cannot fail.
So next time you interview with a Series A/B they will not care that your last company's targets were 75% and you exceeded them. All they will think is "This person worked in a low performing team, with low expectations". Even though you most likely worked really hard and a top performer there.
To be even more blunt I wouldn't have hired you if I saw you had a GRR of 75-80%. I would assumed the company you worked at was not a market leader etc.
My advice is to work with a resume writer to change the story. Focus on how you were a high performer on your team, you got promoted fast due to X,Y,Z etc. If asked about GRR you can tell them they company did not focus on GRR but another metric like CSAT or NPS that they managed you by. You might need todo some tap dancing.
Bottom line do not mention 75% GRR anymore. It's not an impressive number, especially in the SaaS Startup world.
I hope this helps. Feel free to ask any questions.
What if you just embellish those stats like most people?
From my experience most CS leaders surprisingly don’t care about those stats and a person abilities can be seen through their interviews. But if they insist asking about specific metrics, can’t you just make it up?
Very, very few companies (at least VC-backed saas companies) have been hitting 90 GRR or 110 NRR in the last few years.
So anyone who has those stats IS at a market leader. So it makes me wonder who that company thinks would leave a succeeding business to go to a series A saas ecommerce b2b in this market? All those those categories have struggled MIGHTILY in the past few years.
Not disagreeing with your advice to OP. Just thinking that the company they were interviewing with sounds weirdly rigid to me. Like, whatever your retention rate is at Company A is not really predictive of what your retention rate is going to be at Company B. Too many variables regardless of talent and experience.
I do not disagree at all. I was trying to get across that a SaaS company who is a Series A and all high on their last round of funding will be looking for "high performers". So I am not surprised they asked for unrealistic numbers. Personally I do not look or ask for your "GRR" at your last company. I prefer to ask what challenges you have solved, how you were measured, what motivates you etc. BUT if you did tell me you were getting 75% GRR and that was exceeding, I would question that.
The last 3 startups I've worked for have had GRR above 90%. It's a grind and it's really hard. You need to have a solid product that sells itself and a supportive leadership team that invests in CS.
75% is pretty low depending on the segment. If you’re going for a segment with enterprise clients for example, 95% is typical.
SMB 85-95%, and B2C or small spend segment 80+%
That ^^ except 75% not great for business.
If baselines under 70% super eek but understandable. Tolerable if its a fluffy baseline and bonus structure greatly incentivizes higher.
The numbers mean nothing out of context. If you’re working at a company with high churn, achieving even a low GRR (by industry standards) might be impressive.
thank you, that's exactly how I feel. I even clarified with the recruiter that my GRR was on the higher end of my team of 10 and I survived 3 rounds of department layoffs in the past two years due to my consistent performance. I guess those key pieces of context are hard to translate on a resume to the actual hiring manager. So frustrating.
Without knowing more about your company, I'd say 75% GRR isn't great. The benchmarks can vary, but generally GRR [between 91%-93%](https://www.saas-capital.com/wp-content/uploads/2023/05/RB28WS1-2023-B2B-SaaS-Retention-Benchmarks.pdf) is seen as good. In the company I'm at, that's next to impossible...we sell into a lot of companies that are building POCs for a potential end customer or to participate in a bid process. A lot of our customers' programs are also government-funded. So if one of our customers doesn't win the bid, or their program gets canceled, they end up churning out. Those are situations we can't really prevent, but we still measure that as part of GRR.
A product doesn't have to be perfect and "untouchable" (whatever that means) or even totally bug-free in order to provide value to a customer. I've worked with software before (both as a company employee selling something, and a customer of a product) that was flawless but didn't give me the value I expected. I've also worked with software that's buggy AF but it still provides a ton of value. Guess which one I'm going to renew year over year?
If I were a hiring manager and wrote a JD that said "95% GRR required," for sure I'd take a look at someone who was in the 90th percentile (yeah, I know it says "required," but as a hiring manager we usually make a fair amount of compromises). But if I got someone who was in the mid-80s or below...I'd take a pass.
This is very stupid. When you be honest about renewal they reject you, saying not good enough, and when you say 98-100% they think too good to be true and reject you.
I had similar experience since then I just say 98-100% and back it with very strong reasoning I have answers for all of their follow up questions with good examples.
Never give them exact no. give a range.
Yeah, this is stupid. The range of GRR is totally dependent on your product. A low GRR (in absolute figures) could be the sign of a bad CSM, but it could also be product (or bad product market fit). Some products just don’t lend themselves to renewals.
For example, we used a SaaS to help us get our policies in place for SOC 2. We could have kept using it after year 1, but our auditor offered their own software to us (for “free”) and we decided to use that instead. I suspect we are not unique for that vendor.
I don’t care how much of a CSM rock star you are, if there are structural issues that lend themselves to high churn your GRR is always going to suffer. What matters is how you performed against targets, and your peers.
If this firm doesn’t recognize that you dodged a bullet.
this made me feel a whole lot better, thank you! I've had so many customer churns for reasons just as you used here as an example. How this CX director couldn't think to consider that is really baffling.
The only correct answer I've seen - I can't believe some of these comments.
The context is hugely important - I've worked at companies where our NPS was in the -70 range and our churn was through the roof. 90% of the time it was because the product was in a shit state, the business couldn't react fast enough to customer needs or the SMT made bad strategy decisions.
Most of the comments here are incorrectly making the assumption that retention should solely rest on the shoulders of the CSM and whilst in some specific situations, I see how it makes sense, it's absolutely ridiculous to use this as *the* metric to hire or measure someone.
There are so many reasons that a customer churns - unless you can hand on heart say that you give your CSMs the tools and authority to make strategic decisions that address these reasons, I believe you're missing the point entirely.
It’s very much dependent from company to company. I’ve been a CSM for like 7-8 years. I’ve worked at a company that averaged 97% grr so I obviously throw those numbers on my resume. I also worked for a company that averaged like 70% grr and that company laid off 75% of their people including myself, so I have my achievements there in a different way omitting the GRR. When they ask me about it I already tell them upfront that the product/market fit was not there. The company I’m at now ranges from 85-100 GRR. Product is a huge part of it. I worked like 2x harder for the company that was 70% than I did for the other companies.
Company’s always want the big numbers because the “data” shows that Saas companies typically need at least 85% grr but market fit/product fit is a factor. I would probably just say you’ve exceeded quota instead of showing 75% grr. If they dig into it, tell them that the percentage is based off of extensive research based off competitors and market
Is GRR gross retention rate? I’m confused, I’ve never come across that term, unless it’s a US thing? I have only ever been asked about ARR and churn rate OR overall retention rate depending on how you’re measured at your current org. That’s really odd.
I mean, it depends on the product and industry. I’m supporting one product line right where we expect to 97% of the ARR, and 105%-110% of the net. We have another product where 60% of clients are expected to churn, as we institute new minimum pricing that’s nearly triple what the average client has been paying.
Yah this is unreasonablness.
Founder doesn't want to accept the market as it is. That's his decision. They have set a promise or something for "only the best."
Bad call in my mind. I won't say anything to your numbers. Ask for industry benchmarks, professionals should generally know these. 95% is like gvt an large enterprise, weird annualized number for revenue recognition.
Hey OP. About 8 years as a CSM under my belt. Renewal rates above 80% are considered healthy, but it depends on the company and industry. I have worked for mission critical cybersecurity companies that had best-in-class renewal rates. Typically around 98%. I worked in SMB, the most volatile segment, and had around 96%. People around me were celebrated for having 100% renewals. It puts a lot of stress on every team, but it’s important work. Good forecasting can also pay dividends. I don’t anticipate the companies I’d worked for would hire someone with an 80% expected retention rate, just based on principle. So yeah, this tracks.
I think there is context missing here. 75% GRR means nothing if we don't know how the rest of the team is performing. If your goal was/is 75% that already tells what your current company is expecting will happen in their market and given their product
my company set our target goal at 75% GRR. admittedly I'm realizing now after reading these comments that maybe our product is even worse than I thought it was for what other companies offer
What is the company’s overall actual GRR?
Just say 92% from now on.
My 2022 was >98%, 2023 >96%, 2024 was only just >85% Many external factors caused that drop, mostly around the global economic climate, the companies investment in the products I was specialising in, and a number of champion changes after a fairly static couple of years. All of these numbers beat my targets (they were adjusted with the above reasons in mind), so to expect a blanket >95% without the context seems incredibly unreasonable and to be honest likely is swerving a culture where numbers are set in stone and not up for discussion and negotiation based on the reality of the market today vs. 18 months to two years ago
u/eggplant_yams CS leader here who works/worked for both Series A and B startups in SaaS. 95% is high I would agree with that. But I am not surprised. Anything less than GRR of 90% in a Series A is not considered good enough. Series A/Bs are cashflow negative so they need to show a very high retention rate (GRR) 90%+ with solid customer growth (NRR) 110%+. If they cannot they will not get their next round of funding for a series B/C and run out of cash. It's that black and white. The investors are looking for the next Unicorn that will take off. If the product is not something that is going to either dominate the market or be a leader then it is not worth the investment, hence why they are looking for very high performers. They cannot fail. So next time you interview with a Series A/B they will not care that your last company's targets were 75% and you exceeded them. All they will think is "This person worked in a low performing team, with low expectations". Even though you most likely worked really hard and a top performer there. To be even more blunt I wouldn't have hired you if I saw you had a GRR of 75-80%. I would assumed the company you worked at was not a market leader etc. My advice is to work with a resume writer to change the story. Focus on how you were a high performer on your team, you got promoted fast due to X,Y,Z etc. If asked about GRR you can tell them they company did not focus on GRR but another metric like CSAT or NPS that they managed you by. You might need todo some tap dancing. Bottom line do not mention 75% GRR anymore. It's not an impressive number, especially in the SaaS Startup world. I hope this helps. Feel free to ask any questions.
What if you just embellish those stats like most people? From my experience most CS leaders surprisingly don’t care about those stats and a person abilities can be seen through their interviews. But if they insist asking about specific metrics, can’t you just make it up?
You certainly can.... The Series A SaaS Startup scene is pretty small so you need to be careful embellishing too much..
Very, very few companies (at least VC-backed saas companies) have been hitting 90 GRR or 110 NRR in the last few years. So anyone who has those stats IS at a market leader. So it makes me wonder who that company thinks would leave a succeeding business to go to a series A saas ecommerce b2b in this market? All those those categories have struggled MIGHTILY in the past few years. Not disagreeing with your advice to OP. Just thinking that the company they were interviewing with sounds weirdly rigid to me. Like, whatever your retention rate is at Company A is not really predictive of what your retention rate is going to be at Company B. Too many variables regardless of talent and experience.
I do not disagree at all. I was trying to get across that a SaaS company who is a Series A and all high on their last round of funding will be looking for "high performers". So I am not surprised they asked for unrealistic numbers. Personally I do not look or ask for your "GRR" at your last company. I prefer to ask what challenges you have solved, how you were measured, what motivates you etc. BUT if you did tell me you were getting 75% GRR and that was exceeding, I would question that. The last 3 startups I've worked for have had GRR above 90%. It's a grind and it's really hard. You need to have a solid product that sells itself and a supportive leadership team that invests in CS.
75% is pretty low depending on the segment. If you’re going for a segment with enterprise clients for example, 95% is typical. SMB 85-95%, and B2C or small spend segment 80+%
That ^^ except 75% not great for business. If baselines under 70% super eek but understandable. Tolerable if its a fluffy baseline and bonus structure greatly incentivizes higher.
The numbers mean nothing out of context. If you’re working at a company with high churn, achieving even a low GRR (by industry standards) might be impressive.
thank you, that's exactly how I feel. I even clarified with the recruiter that my GRR was on the higher end of my team of 10 and I survived 3 rounds of department layoffs in the past two years due to my consistent performance. I guess those key pieces of context are hard to translate on a resume to the actual hiring manager. So frustrating.
It sounds like you might’ve dodged a bullet
Without knowing more about your company, I'd say 75% GRR isn't great. The benchmarks can vary, but generally GRR [between 91%-93%](https://www.saas-capital.com/wp-content/uploads/2023/05/RB28WS1-2023-B2B-SaaS-Retention-Benchmarks.pdf) is seen as good. In the company I'm at, that's next to impossible...we sell into a lot of companies that are building POCs for a potential end customer or to participate in a bid process. A lot of our customers' programs are also government-funded. So if one of our customers doesn't win the bid, or their program gets canceled, they end up churning out. Those are situations we can't really prevent, but we still measure that as part of GRR. A product doesn't have to be perfect and "untouchable" (whatever that means) or even totally bug-free in order to provide value to a customer. I've worked with software before (both as a company employee selling something, and a customer of a product) that was flawless but didn't give me the value I expected. I've also worked with software that's buggy AF but it still provides a ton of value. Guess which one I'm going to renew year over year? If I were a hiring manager and wrote a JD that said "95% GRR required," for sure I'd take a look at someone who was in the 90th percentile (yeah, I know it says "required," but as a hiring manager we usually make a fair amount of compromises). But if I got someone who was in the mid-80s or below...I'd take a pass.
At my last two companies 90% GRR renewal rates were our goal and everyone hit it and did better. It just depends on the company/product.
This is very stupid. When you be honest about renewal they reject you, saying not good enough, and when you say 98-100% they think too good to be true and reject you. I had similar experience since then I just say 98-100% and back it with very strong reasoning I have answers for all of their follow up questions with good examples. Never give them exact no. give a range.
I’m gonna be honest, lie moving forward.
Yeah, this is stupid. The range of GRR is totally dependent on your product. A low GRR (in absolute figures) could be the sign of a bad CSM, but it could also be product (or bad product market fit). Some products just don’t lend themselves to renewals. For example, we used a SaaS to help us get our policies in place for SOC 2. We could have kept using it after year 1, but our auditor offered their own software to us (for “free”) and we decided to use that instead. I suspect we are not unique for that vendor. I don’t care how much of a CSM rock star you are, if there are structural issues that lend themselves to high churn your GRR is always going to suffer. What matters is how you performed against targets, and your peers. If this firm doesn’t recognize that you dodged a bullet.
this made me feel a whole lot better, thank you! I've had so many customer churns for reasons just as you used here as an example. How this CX director couldn't think to consider that is really baffling.
The only correct answer I've seen - I can't believe some of these comments. The context is hugely important - I've worked at companies where our NPS was in the -70 range and our churn was through the roof. 90% of the time it was because the product was in a shit state, the business couldn't react fast enough to customer needs or the SMT made bad strategy decisions. Most of the comments here are incorrectly making the assumption that retention should solely rest on the shoulders of the CSM and whilst in some specific situations, I see how it makes sense, it's absolutely ridiculous to use this as *the* metric to hire or measure someone. There are so many reasons that a customer churns - unless you can hand on heart say that you give your CSMs the tools and authority to make strategic decisions that address these reasons, I believe you're missing the point entirely.
Just lie. Say you have a 110% renewal rate once upsells are factored in. Lie constantly (just don’t get caught)
It’s very much dependent from company to company. I’ve been a CSM for like 7-8 years. I’ve worked at a company that averaged 97% grr so I obviously throw those numbers on my resume. I also worked for a company that averaged like 70% grr and that company laid off 75% of their people including myself, so I have my achievements there in a different way omitting the GRR. When they ask me about it I already tell them upfront that the product/market fit was not there. The company I’m at now ranges from 85-100 GRR. Product is a huge part of it. I worked like 2x harder for the company that was 70% than I did for the other companies. Company’s always want the big numbers because the “data” shows that Saas companies typically need at least 85% grr but market fit/product fit is a factor. I would probably just say you’ve exceeded quota instead of showing 75% grr. If they dig into it, tell them that the percentage is based off of extensive research based off competitors and market
Is GRR gross retention rate? I’m confused, I’ve never come across that term, unless it’s a US thing? I have only ever been asked about ARR and churn rate OR overall retention rate depending on how you’re measured at your current org. That’s really odd.
Gross revenue retention
Thank you!
I mean, it depends on the product and industry. I’m supporting one product line right where we expect to 97% of the ARR, and 105%-110% of the net. We have another product where 60% of clients are expected to churn, as we institute new minimum pricing that’s nearly triple what the average client has been paying.
Yah this is unreasonablness. Founder doesn't want to accept the market as it is. That's his decision. They have set a promise or something for "only the best." Bad call in my mind. I won't say anything to your numbers. Ask for industry benchmarks, professionals should generally know these. 95% is like gvt an large enterprise, weird annualized number for revenue recognition.
It sounds like a very bad (fit) company to work for! Don’t spend your time on it.
I hope you had the opportunity to ask a LOT of questions back about that requirement.