Mind the Gap
Featuring: Chris Weber, Randall Lucas
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Retention is king in SaaS, for both operators and lenders
While all retention is good, not all retention is equal. And the ratio between gross revenue retention and net revenue retention contains useful diagnostic information.
We call this “The Gap."
While the math here is simple, The Gap is a rarely discussed metric that provides helpful insights into the continuing health of your SaaS companies and customers.
It’s not often discussed, but the GRR-NRR gap can be a useful “sanity check” on a SaaS company’s metrics, and when it falls outside of the usual range, can give a hint to operators and investors as to when something might need tweaking.