Welcome to The TechCrunch Exchange, a weekly startup-and-markets newsletter. It’s inspired by the daily TechCrunch+ column from which it got its name. Want it in your inbox every Saturday? Register here.
For SaaS companies, net dollar retention is more on investors’ radar than ever. But it shouldn’t eclipse overall retention dollars: If you’re not tracking both metrics, you may struggle to add new customers to an already-expiring bucket. Let’s investigate. – Anna
Total Dollar Retention “What Really Gets You Through Hard Times”
“Overall retention speaks to the true stickiness and health of your customer base. Growth Level VC Renee Stewart said during a TechCrunch-sponsored talk on Disruption in 2021.
But, added the co-head of Vista Equity Partners’ growth-stage Endeavor Fund, most VCs he spoke to “probably only care about net retention.” However, her comments were made in 2011. Not in 2021, but in 2022. “Tough times” have come upon us since then, causing investors and founders to remember business fundamentals.
Alex And I’ve written before about the importance of maintaining net dollars when efficient growth becomes the new holy grail. But how does it differ from total dollar retention, and how has the latter fared in most tech companies? Let’s dive in.