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How Professional Services Can Grow Net Dollar Retention
It’s more critical than you think
In this article, we will discuss:
- Why Net Dollar Retention is Critical
- How Professional Services Can Grow NDR
- Before You Begin a Professional Services NDR Program
- How to Launch a Professional Services NDR Program
- Should Professional Services Be Paid for Upgrades/Expansions?
Why Net Dollar Retention is Critical
Net Dollar Retention (NDR) is one of the most critical metrics for SaaS companies. As SaaS companies scale, they can become more profitable and profitable. NDR is a critical metric that describes how effectively a SaaS company can grow its existing customers. It costs significantly less to win business from an existing customer than to win a net new logo.
Net Dollar Retention is a percentage equal to Annual Recurring Revenue (ARR) + upgrades & expansions — downgrades — churn all divided by beginning ARR. A healthy SaaS business has net dollar retention of over 100% because upgrades in the customer base are outpacing churn and downgrades. A recent analysis of 59 SaaS public companies that have IPO’d in the past two years found that the median NDR was 111% while the…
