Improve Gross Revenue Retention, or Stop measuring what you think is your job

+21 pts gross retention · +18 pts net retention · 2 years

Gross revenue retention up 21 points in two years. Net revenue retention up 18. Bookings ahead of plan.

That was a $150M ARR data and analytics business unit ready for its next stage. If you're trying to improve gross revenue retention, the first move may not be the one you expect. It wasn't a new program, a new tool or a new team. It was setting the metrics aside.

The metric trap

Every team had a scorecard, and every scorecard was reasonable. Sales tracked bookings. Customer success tracked health scores. Support tracked time to resolve. Product tracked releases. Each team measured its job, and measured it well.

Every team measured its job. Retention lived between all of them.

That's the trap. A team measures what it believes its job is. Retention isn't any one team's job, so it doesn't show up on anyone's scorecard as something they can move. It shows up in the monthly financials at a town hall, or in the board deck with no real accountability mapped to it. Or worse, in your annual goals with a specific number attached. Yes, you are now personally responsible for a target that not even the customer success team can hit.

Green scorecards and a retention number that won't move can live side by side for years.

Throw the metrics out

Not forever. Just for as many working sessions as it takes. The leadership team set every existing scorecard aside and worked one question: where is revenue leaking, and why?

That question does two things. It moves the conversation from the org chart to the customer. And it makes the data the referee: churn and downgrades by account, by product, by reason. Not opinions about which team owns the gap.

Every team was measuring its job. Nobody was measuring the problem.

Agree on the problem the data shows

The hard part is agreement, not analysis. The data usually points somewhere within a day. Getting a leadership team to say "that's the problem, and it's ours together" takes longer.

Agreement is the deliverable of this step. Write the problem down in one or two sentences, and every leader signs up to it. If a leader can't sign, you don't have the problem yet. You have a draft.

Measure only what moves it

Once the problem was agreed, the list of measures got short fast. The rule: a metric stays in the leadership review only if moving it shrinks the problem.

The test for every metric on the page: if this goes green, does the problem get smaller? If it can go green while retention goes red, it's reporting activity, not progress.

One test for every metric on the page. Activity metrics move to the team review, where they belong.

Activity metrics aren't useless. They move to each team's own operating review, where they belong. The leadership review keeps the short list.

How to improve gross revenue retention without adding a dashboard

The instinct after a retention problem is to build a retention dashboard. The team built less, not more. Two moves carried the two years.

Year 1: one number everyone plans from

Forecasting was rebuilt bottom-up, account by account. One source of truth for what each account is worth and where it's heading. Sales, customer success, finance and product planned from the same number instead of reconciling four versions of it.

Year 2: one story across every product line

Standard assets, plays and workflows, and one message to the customer no matter which product they bought first. A customer who hears one coherent story is easier to keep and easier to expand.

One number, then one story. The question never changed.

The operating job across both years was keeping the question stable. Priorities shift, quarters get noisy, and someone proposes a new metric every month. The question stayed the same: where is revenue leaking, and why?

The points belong to the team that ran it.

Where this fits: Smelt, Proof

This Forge Note maps to the six stages of The Rustin Forge Cycle ©.

• Smelt (Analyze). Separate the metal from the slag. Setting the scorecards aside and agreeing on the problem is Smelt work: root causes, ranked by the dollars at stake.

• Proof (Measure). Gross and net retention are Proof metrics. Plan against actual, every month, red or green.

  
  

One test for your next leadership review: take the deck, and for each metric ask whether the problem gets smaller when it goes green. Anything that fails is a candidate to cut.

If this sounds like the trap you've fallen into, book a Spark Test. Thirty minutes, free, and you leave knowing where revenue is leaking and what it's worth.

Dustin J. Richardson is the Founder & Fractional Operator of Rustin Forge Consulting LLC, based in Minneapolis and working worldwide.