NDR Rate Goal Setting

dancook

What is your NDR rate goal for your team and why? Are you taking into consideration the macroeconomic environment in 2023 when goal-setting?

In your opinion, what would you set as your NDR rate goal for a green CS team with less than 2 years of renewal history?

Rich Rans

Here are my thoughts, and they would apply to any financial goal including NDR.

1. Get a top down number based on the company budget. There is some expectation around any financial goals and that should help set a target.
2. Review the NDR history. Even if just one year, that can give you a foundation.
3. Depending on how many customers you have, can you build a bottoms up number? Define what accounts or group accounts into cohorts of accounts. For each apply a renewal rate or probability of renewal (your best guess). This bottoms up model can not only be used to set a goal, but also a path to how you are going to get there.

Now you have 3 data points to triangulate your goals, and the cohorts that help you define a path to reaching the goal.

Jay Nathan

Agree with @Rich Rans here. This is not a decision that the CS team should make, but a conversation with the CFO/finance team to understand what's been modeled into the budget from a retention standpoint. The CS leader's job here is to 1) bring visibility to specific factors that finance needs to be aware of when creating their models, 2) forecasting where you'll actually end up from a renewal perspective each quarter, and 3) most importantly, devise strategies that help achieve retention to targets.

The pillars of our retention strategy this year are:

1. Focus on top XX customers - high-touch relationships
2. Commercial expansion opportunities for various customer segments (if customers are expanding they aren't churning)
3. Enhanced renewal program with multi-year discounts
4. Scaled customer success and community programs