Jul 31, 2025

Dear SaaStr: Can You Ever Get Past 100% NRR If You Sell Just to SMBs? Yes … but probably not if you are single product, and don't go at all more upmarket. SMBs churn at the highest rate, often as high as 3% a month for the lowest end of SMB / prosumer. So unless you are selling them more stuff, it's almost impossible to hit 100% NRR. More on how HubSpot grew from 75% NRR to 100%-110% here: Still it can be done, and has been done by almost all the leaders: Upsell and Cross-Sell Like Crazy You need to find ways to expand your revenue from existing customers. Bill com , for example, added payments as a feature and saw their NRR shoot up to 110%, and later to 121%. In the SaaStr Fund portfolio, MangoMint and Owner have done the same. Even small upsells—like adding more seats, features, or integrations—can make a big difference. The key is to build a product that grows with your customers. Go Slightly Upmarket Even if you're focused on SMBs, moving slightly upmarket can help stabilize your NRR. Companies like Zendesk and Shopify started with SMBs but gradually added mid-market and larger customers. Shopify, for instance, now gets 25% of its revenue from Shopify Plus, which helps drive their NRR to 100% ‌ . You don't have to abandon SMBs, but adding a layer of larger customers can offset churn. Focus on Gross Retention First Gross retention is the foundation. If you're losing 20-30% of your customers annually, it's going to be nearly impossible to hit 100% NRR. The best SMB SaaS companies have gross retention in the 75-85% range ‌ . To improve this, focus on customer success—ensure your customers are getting value from your product and address churn risks early. Add a Second Product or Revenue Stream Many companies find that adding a second product or service is critical to driving NRR over 100%. For example, Asana introduced a base platform fee for its AI Studio, which created a new revenue stream while still serving its core customers ‌ . This is also the key to HubSpot's continuing success here. If you can upsell a second product to your existing base, you'll see a big lift in NRR. Segment Your Customers Not all SMBs are created equal. Segment your customers by size, industry, or usage patterns, and focus your upsell efforts on the ones with the highest potential for expansion. This segmentation can also help you identify trends and address churn risks more effectively. Invest in Product Stickiness Your product needs to be indispensable. Look at usage patterns and find ways to make your product more embedded in your customers' workflows. The more they rely on your product, the less likely they are to churn. This could mean adding integrations, improving onboarding, or offering training to ensure customers are fully utilizing your product ‌ Get Better at Onboarding . Much Better. Way too many SMB products see 10% of their new customers or more never onboard. That's often the most attackable source of churn, and more attackable place to drive NRR and GRR up. Be Ruthless About Churn You need to understand why customers are churning and address those issues head-on. Use early warning systems, like tracking engagement and usage patterns, to predict and prevent churn before it happens. The DEAR framework (Deployment, Engagement, Adoption, ROI) is a good starting point for identifying at-risk customers ‌ . Too many start-ups don't know why churn is so high, or at least, don't know why well enough and with enough data to attack it relentlessly. And many more examples here: Don't Settle for Less Than 100% NRR from SMBs (Updated) And a deep dive with MangoMint's CEO on how they did it here: The Rise of Vertical SaaS: Achieving 110% NRR from SMBs with Mangomint's CEO Related Posts Dear SaaStr: What Prompted You To Sell Your Startups? Dear SaaStr: Does A Founder Need To Sell Themselves? SaaStr at $100,000,000 in Revenue: The Top 10 Re-Learnings