The Signal That Unlocks SaaS Growth

Net Revenue Retention (NRR) has become a key challenge for SaaS growth. Since Q1 2023, average NRR has dipped from 110% to 107% at the start of 2025. Today, nearly 60% of companies report lower NRR than two years ago. For CEOs, reversing this trend and growing revenue from the existing customer base has become their top priority. The question in many companies is: what can we actually do to improve NRR? 

To answer this question, we partnered with QuadSci to analyze 160 billion telemetry data points across 9,100 different accounts. The goal was to know, definitively, what separates accounts that grow from those that churn.

The finding confirmed what many CEOs have long suspected: solution usage is the heart of the matter. In fact, usage explains 80% of customers’ renewal and expansion decisions—making it more impactful than all other factors combined. This should reassure teams that their focus on product adoption is the right one. But it also raises a critical question: if usage is so predictive, why are outcomes so hard to predict?

Volatility Creates Noise that Blurs Growth Signals 

Most SaaS teams already track usage. They have the dashboards and often have teams dedicated to analyzing them. But the truth is, most companies are looking at the wrong or incomplete signals. Usage levels are notoriously volatile. One quarter, a customer's usage is up, the next it's down. This leaves teams trying to figure out if a dip is a temporary blip or an early signal that a customer is about to churn.

This volatility forces teams into a reactive loop. They waste precious time and resources trying to save accounts that are already lost, while simultaneously missing clear expansion signals from healthy customers who just had a slow month. It’s an inefficient, frustrating way to manage a customer base.

Usage Consistency Provides the Signal SaaS Companies Need 

Teams focusing just on usage levels will never achieve the predictive accuracy they need. Seeing the true signal requires looking at two critical dimensions at once: Usage Level and Usage Consistency. The first tells you how much a customer uses the solution; the second tells you how predictably they use it over time.

When you plot customers on these two axes, the noise of volatility disappears. What previously looked like chaos and an infinite variety of customer behaviors naturally clusters into six distinct, predictable patterns. These six patterns are called cohorts, and they are the key to improving NRR.

Six Cohorts Tell You Which Accounts Will Churn, Renew, and Grow 

Cohorts are archetypes that reflect customer behavior and indicate an account’s potential over time. Cohorts make it clear whether an account is at risk of churning or presents an expansion opportunity. This creates clear zones of action that go-to-market (GTM) teams can use to align their efforts with likely outcomes, targeting renewal efforts for at-risk accounts and expansion plays for growth opportunities.

The Zone of Expansion (High NRR):

• Power Users: The most consistent and engaged accounts that have fully integrated the solution.
• Enthusiastic Adopters: High usage, but haven't settled into a consistent pattern yet. Strong engagement.
• Converts: The first group where usage level and consistency signal a likely renewal.

The Zone of Contraction (Low NRR):

• Explorers: New accounts with low usage and no clear pattern. They are still figuring things out.
• Strugglers: Accounts with consistently low usage that aren't finding value.
• Disconnected: The solution is 'shelfware'; these accounts are almost certain to churn. 

Cohorts represent a departure from static segmentation approaches because they evolve as customer needs change. Knowing an account’s cohort predicts whether it will churn, renew, or expand with 90% accuracy, up to a full year in advance.

From Guesswork to Predictable Growth 

Being able to see an account’s usage pattern and how it evolves changes account management. Companies putting this cohort model to work are seeing an average 5% lift in NRR. They're finally able to do what CEOs always wanted: reduce wasted effort and focus their best people on the right accounts at the right time.

This market doesn't reward guesswork. The decline in NRR isn't inevitable; it's a problem that can be solved with the right data and a clear strategy. It's time for CEOs to give their teams the insights they need to act decisively.

Download the Full Report Engineering SaaS Account Growth: How Leading CEOs Are Turning NRR Decline into Predictable Expansion.

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