Everyday it seems like more and more economists are predicting a recession for 2023. Such a prospect is causing many subscription businesses to focus their limited resources on driving net retention as a strategy to “weather the storm”.
But, as Gainsight CEO Nick Mehta often talks about, there’s more nuance to retention than meets the eye. A holistic approach, one that balances minimizing loss and maximizing value from existing customers, will be imperative for navigating the economic turbulence ahead.
At Zuora, we’re lucky that our customers are some of the best subscription businesses in the world. Many of which have outperformed on both ends of the retention equation. We thought it might be helpful to take a closer look and offer observations of how these particular businesses have changed over the last 12 months, during some of the most turbulent economic events in recent memory.
Introducing Zuora’s “Super Retainers.” A class of companies that are rising above the macro challenges and achieving best in class growth. In order to be included in this Super Retainer cohort, a customer business had to score in the bottom 30th percentile, relative to all Zuora customers, in overall account churn rate while at the same time scoring in the top 30th percentile in growth of their average revenue per account (i.e. ARPA).
Additionally, in keeping with recent analyses, we were able to break out the observations by industries. The High Tech, Media, and Manufacturing industries all had a meaningful amount of super retainer businesses.
By examining aggregated trends for the Super Retainer cohort, we’re seeing signals of specific strategies that Super Retainers have been executing in the last 12 months.. This blog post will dive in on two of those signals specifically.