The Real Need for NRR

A senior sales executive at a SaaS company told me recently, “We’re doing well — our NRR is 97%.”

It’s a comment I hear too often. And maybe there was a time that might have been considered decent, but not today. Especially not for growth-stage companies looking to raise or to build enterprise value.

Don’t be lulled into complacency. The expectations are clear. And a recent SaaStr article lays it out plainly: Series B SaaS companies today are expected to show:

• A credible path to profitability

• CAC payback periods under 18 months

• Net revenue retention (NRR) above 110%

That last number often catches teams by surprise. Many still treat 100% NRR as the goal, or even something to celebrate. But investors and buyers are now prioritizing efficiency and durability. They’re not just funding growth at all costs. They’re funding profitable, predictable growth. And 110%+ NRR is one of the best signals of that.

The path to those outcomes isn’t just better sales execution. It’s better customer experience execution.

Because NRR is a lagging indicator of customer value realization. And value realization is a function of how well your business sets up customers to be successful, quickly and repeatedly.

If customers aren’t renewing or expanding, it’s rarely just a product gap. It’s often that they didn’t achieve the outcome they were sold, or simply didn’t achieve it fast enough. That has downstream effects. When churn rises, CAC must rise to compensate. CAC payback lengthens. Margins shrink. Forecasts wobble. Because net-new acquisition is simply less probable.

On the other hand, when you treat customer experience as a growth discipline, not just a support function or cost center, a very different trajectory unfolds:

• Customers get to value faster

• They require less effort to retain

• They engage more meaningfully

• They stay longer

• They expand with less friction

This unlocks a powerful compounding effect: NRR climbs. CAC payback shortens. Margins improve. And confidence in your business model goes up.

Customer experience isn’t separate from growth. It’s the system that supports it. Especially now, as capital gets more selective and due diligence goes deeper, your ability to deliver and prove customer value is becoming a competitive advantage in itself.

The bar hasn’t moved. It’s just more visible now. And much harder to ignore.

If your NRR is below 110%, don’t assume it’s a sales or pricing problem. More often than not, it’s a value realization problem in disguise.