March 28, 2025
Tamanna Mishra
The best SaaS companies don’t just retain customers. They expand them.
That’s why Net Dollar Retention (NDR) is the metric that separates high-growth SaaS businesses from the laggards. It’s that one metric that SaaS leaders simply can’t afford to ignore anymore.
Top SaaS companies maintain NDR above 120%. That means they generate more revenue from existing customers than they lose from churn. SaaS companies with high NDR are more resilient, more profitable, and better positioned to dominate their market.
Investors and boards care about NDR because it signals sustainable growth. A high NDR means your company can scale without constantly burning resources on new customer acquisition.
But real life (and business) works differently. Most SaaS businesses struggle with churn, stalled expansion, and weak retention. (But not if your sales to customer success handoffs are seamless and truly complete. That’s where Sybill’s Deal Summaries act as a guard rail. Click here to know more.)
What do they really need to win at Net Dollar Retention? A clear strategy to drive expansion revenue, reduce churn, and create sticky customer relationships.
In this blog, we’ll break down:
Let’s go.
Net Dollar Retention (NDR) is one of the most critical metrics for SaaS companies, measuring how much revenue is retained and expanded from existing customers over a given period.
Unlike customer retention, which only tracks churn, NDR factors in both expansion revenue (upsells, cross-sells, upgrades) and contraction (downgrades, churn). It tells you whether your existing customer base is growing or shrinking in value over time.
Investors and stakeholders prioritize NDR as a core indicator of sustainable revenue growth because it reflects a company’s ability to scale without excessive reliance on new customer acquisition.
A high NDR signals that customers aren’t just sticking around. They’re spending more over time. Companies with NDR above 120% grow 2-3x faster than those struggling to keep it above 100%. In fact, industry benchmarks show that publicly traded SaaS companies with NDR above 130% consistently outperform their competitors in market valuation and revenue growth.
For example, Snowflake, a SaaS leader, boasts an NDR above 150%, demonstrating the power of continuous expansion revenue. Meanwhile, SaaS companies with NDR below 100% often struggle with shrinking revenues, as customer churn erodes growth.
Top performing SaaS companies maintain an NDR above 120%, proving that customer expansion is just as important - if not more - than acquisition.
For a deeper understanding of Net Dollar Retention, click here.
Net Dollar Retention (NDR) is a key metric that helps SaaS businesses measure revenue retention and expansion from their existing customer base. A strong NDR means your company is growing revenue without relying solely on new customer acquisition.
Where:
Let's say:
Your NDR would be:
Benchmark: Top SaaS companies aim for an NDR between 110-130% for strong and sustainable growth.
Net Dollar Retention (NDR) is the ultimate growth metric for modern SaaS sales teams. By reducing churn, increasing expansion revenue, and improving customer experience, you can ensure steady revenue growth without solely relying on new customer acquisition.
Here’s how to optimize NDR with proven, high-impact strategies.
Keeping existing customers is significantly more cost-effective than acquiring new ones.
How to implement it:
Pro Tip: Implement Customer Health Scores (CHS) to identify at-risk accounts and intervene before they churn.
Expansion revenue directly improves NDR, and usage-based pricing models have become a winning strategy. Companies like AWS and Snowflake have mastered this by allowing customers to scale their usage rather than forcing predefined tiers.
How to implement it:
Pro Tip: Gamify adoption. Show customers how their usage compares to industry peers to drive competitive engagement.
The deeper a customer integrates into your product, the less likely they are to churn.
How to do it:
Pro Tip: Identify and nurture power users. They are the least likely to churn and can influence others in their organization.
AI helps sales and customer success teams anticipate churn risks and identify expansion opportunities.
How to do it:
Pro Tip: AI can detect "silent churn” - customers who haven’t officially canceled but have stopped engaging with your reps, CS, or the product. Catch them before they leave.
Customer support is one of the biggest drivers of churn. 65% of customers report switching providers after just one poor support experience.
How to improve it:
Pro Tip: Faster response times directly improve NDR. Aim for under a 2-hour response time for high-value customers.
Poor onboarding is one of the biggest drivers of early churn in SaaS. Studies show that 63% of customers consider onboarding a key factor in their purchasing decision, and those with a bad experience are far more likely to churn within the first few months.
A strong onboarding experience ensures that customers reach their first "aha moment" quickly - when they see the core value of your product in action. The faster this happens, the higher your retention and expansion potential.
Pro Tip: Customers who complete onboarding within 7 days have 2x higher retention rates than those who don’t. Watch out!
Proactively driving expansion revenue ensures continuous revenue growth.
How to do it:
Pro Tip: "Land and expand" works best when sales teams focus on small, early wins before introducing larger commitments.
20-40% of churn is involuntary, often due to failed payments, credit card issues, or account inactivity.
How to do it:
Pro Tip: Offer small incentives (discounts, added features) for customers who proactively update their billing details before issues arise.
Net Dollar Retention (NDR) is a crucial predictor of sustainable, scalable revenue growth for SaaS enterprises.
SaaS companies that consistently improve churn reduction, expansion strategies, and customer engagement unlock recurring revenue growth without the pressure of constant new acquisition.
What’s better? They save dollars doing this, because acquiring a single new customer costs 5x more than retaining an existing one. In fact, a minor 5% increase in customer retention can boost profits by up to a staggering 75%!
Still unsure why most successful SaaS businesses don’t leave NDR to chance? They proactively track early churn signals, personalize upsell strategies, and leverage automation to improve retention.
The result? Higher NDR, stronger customer relationships, and long-term profitability. In sustainable growth.
Sybill empowers SaaS companies and teams with AI-driven insights to optimize NDR at every stage of the customer journey.
Boost NDR.
Drive expansion.
Retain customers for longer.
The best SaaS companies don’t just retain customers. They expand them.
That’s why Net Dollar Retention (NDR) is the metric that separates high-growth SaaS businesses from the laggards. It’s that one metric that SaaS leaders simply can’t afford to ignore anymore.
Top SaaS companies maintain NDR above 120%. That means they generate more revenue from existing customers than they lose from churn. SaaS companies with high NDR are more resilient, more profitable, and better positioned to dominate their market.
Investors and boards care about NDR because it signals sustainable growth. A high NDR means your company can scale without constantly burning resources on new customer acquisition.
But real life (and business) works differently. Most SaaS businesses struggle with churn, stalled expansion, and weak retention. (But not if your sales to customer success handoffs are seamless and truly complete. That’s where Sybill’s Deal Summaries act as a guard rail. Click here to know more.)
What do they really need to win at Net Dollar Retention? A clear strategy to drive expansion revenue, reduce churn, and create sticky customer relationships.
In this blog, we’ll break down:
Let’s go.
Net Dollar Retention (NDR) is one of the most critical metrics for SaaS companies, measuring how much revenue is retained and expanded from existing customers over a given period.
Unlike customer retention, which only tracks churn, NDR factors in both expansion revenue (upsells, cross-sells, upgrades) and contraction (downgrades, churn). It tells you whether your existing customer base is growing or shrinking in value over time.
Investors and stakeholders prioritize NDR as a core indicator of sustainable revenue growth because it reflects a company’s ability to scale without excessive reliance on new customer acquisition.
A high NDR signals that customers aren’t just sticking around. They’re spending more over time. Companies with NDR above 120% grow 2-3x faster than those struggling to keep it above 100%. In fact, industry benchmarks show that publicly traded SaaS companies with NDR above 130% consistently outperform their competitors in market valuation and revenue growth.
For example, Snowflake, a SaaS leader, boasts an NDR above 150%, demonstrating the power of continuous expansion revenue. Meanwhile, SaaS companies with NDR below 100% often struggle with shrinking revenues, as customer churn erodes growth.
Top performing SaaS companies maintain an NDR above 120%, proving that customer expansion is just as important - if not more - than acquisition.
For a deeper understanding of Net Dollar Retention, click here.
Net Dollar Retention (NDR) is a key metric that helps SaaS businesses measure revenue retention and expansion from their existing customer base. A strong NDR means your company is growing revenue without relying solely on new customer acquisition.
Where:
Let's say:
Your NDR would be:
Benchmark: Top SaaS companies aim for an NDR between 110-130% for strong and sustainable growth.
Net Dollar Retention (NDR) is the ultimate growth metric for modern SaaS sales teams. By reducing churn, increasing expansion revenue, and improving customer experience, you can ensure steady revenue growth without solely relying on new customer acquisition.
Here’s how to optimize NDR with proven, high-impact strategies.
Keeping existing customers is significantly more cost-effective than acquiring new ones.
How to implement it:
Pro Tip: Implement Customer Health Scores (CHS) to identify at-risk accounts and intervene before they churn.
Expansion revenue directly improves NDR, and usage-based pricing models have become a winning strategy. Companies like AWS and Snowflake have mastered this by allowing customers to scale their usage rather than forcing predefined tiers.
How to implement it:
Pro Tip: Gamify adoption. Show customers how their usage compares to industry peers to drive competitive engagement.
The deeper a customer integrates into your product, the less likely they are to churn.
How to do it:
Pro Tip: Identify and nurture power users. They are the least likely to churn and can influence others in their organization.
AI helps sales and customer success teams anticipate churn risks and identify expansion opportunities.
How to do it:
Pro Tip: AI can detect "silent churn” - customers who haven’t officially canceled but have stopped engaging with your reps, CS, or the product. Catch them before they leave.
Customer support is one of the biggest drivers of churn. 65% of customers report switching providers after just one poor support experience.
How to improve it:
Pro Tip: Faster response times directly improve NDR. Aim for under a 2-hour response time for high-value customers.
Poor onboarding is one of the biggest drivers of early churn in SaaS. Studies show that 63% of customers consider onboarding a key factor in their purchasing decision, and those with a bad experience are far more likely to churn within the first few months.
A strong onboarding experience ensures that customers reach their first "aha moment" quickly - when they see the core value of your product in action. The faster this happens, the higher your retention and expansion potential.
Pro Tip: Customers who complete onboarding within 7 days have 2x higher retention rates than those who don’t. Watch out!
Proactively driving expansion revenue ensures continuous revenue growth.
How to do it:
Pro Tip: "Land and expand" works best when sales teams focus on small, early wins before introducing larger commitments.
20-40% of churn is involuntary, often due to failed payments, credit card issues, or account inactivity.
How to do it:
Pro Tip: Offer small incentives (discounts, added features) for customers who proactively update their billing details before issues arise.
Net Dollar Retention (NDR) is a crucial predictor of sustainable, scalable revenue growth for SaaS enterprises.
SaaS companies that consistently improve churn reduction, expansion strategies, and customer engagement unlock recurring revenue growth without the pressure of constant new acquisition.
What’s better? They save dollars doing this, because acquiring a single new customer costs 5x more than retaining an existing one. In fact, a minor 5% increase in customer retention can boost profits by up to a staggering 75%!
Still unsure why most successful SaaS businesses don’t leave NDR to chance? They proactively track early churn signals, personalize upsell strategies, and leverage automation to improve retention.
The result? Higher NDR, stronger customer relationships, and long-term profitability. In sustainable growth.
Sybill empowers SaaS companies and teams with AI-driven insights to optimize NDR at every stage of the customer journey.
Boost NDR.
Drive expansion.
Retain customers for longer.
