108% NDR Crisis: Why 'Good Enough' Retention Is Killing SaaS Growth

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I read one of the founders saying, "Our NDR is 108%. That's the new benchmark, right? We're doing fine."

I would say wrong. You're dying slowly.

New Reality (And Why It's Dangerous)

The data from October 2025:

• Median SaaS NDR dropped to 108%, down from 123% in 2022​

• Public SaaS companies are struggling to maintain 110%+ consistently

• "Good enough" mindset spreading through founder communities

Why 108% is a death sentence:

• Unit economics break down below 110% NDR for most SaaS models

• Growth compounds slower, takes 3x longer to double revenue

• Valuation multiples compress when investors see declining retention trends

• New customer acquisition can't compensate for leaky retention

What's Actually Happening Behind The Numbers

From my work: Companies accepting 108% NDR aren't fixing the root problems; they're managing decline.

The real issues:

• Customer success focused on satisfaction surveys, not usage expansion

• Product roadmap driven by new features, not existing customer value

• Pricing models that don't scale with customer growth

• Onboarding that gets customers activated, not addicted

The dangerous logic:
"Everyone's NDR is down, so 108% is fine." This is how companies slowly become irrelevant.

Root Causes (What Most Operators Miss)

Value realisation gaps:

• Customers aren't reaching the "aha moment" that drives expansion

• Success metrics focus on feature adoption, not business outcomes

• No clear path from basic usage to premium value

Pricing and packaging problems:

• Seat-based models that penalise customer growth

• Feature tiers that don't align with customer success stages

• No consumption-based expansion opportunities

Operational blindspots:

• Churn prediction models that react don't prevent

• Account expansion triggers based on time, not usage signals

• Customer success teams measuring activities, not revenue impact

Operator Framework to Fix NDR

Step 1: Audit your expansion engine

• What percentage of existing customers expand annually?

• Which features/usage patterns predict expansion?

• How long between activation and first expansion?

• What's your average expansion deal size vs initial ACV?

Step 2: Build predictive expansion systems

• Usage thresholds that trigger expansion conversations

• Customer health scores that identify expansion opportunities

• Automated workflows that nurture high-potential accounts

• Success team metrics tied to expansion revenue, not satisfaction

Step 3: Fix the product-market fit for expansion

• Align pricing with customer value realisation

• Create natural upgrade paths based on customer growth

• Build features that become more valuable at scale

• Design onboarding that showcases expansion possibilities

Step 4: Operationalise retention excellence

• Weekly cohort analysis to spot declining trends early

• Customer success playbooks for different expansion stages

• Product usage data integrated with sales/success systems

• Regular customer interviews focused on unmet needs

What Winners Do Differently

They don't accept market benchmarks:

• Target 115%+ NDR regardless of industry averages

• Treat retention as a growth engine, not a defensive metric

• Invest in expansion before acquisition

They build retention systems:

• Predictive analytics that prevent churn before it happens

• Customer success operations that scale with revenue

• Product development aligned with existing customer expansion

They measure leading indicators:

• Time to first expansion (not just time to value)

• Usage velocity trends by customer segment

• Feature adoption patterns that predict growth

• Customer lifetime value by acquisition channel

Bottom Line

108% NDR isn't the "new normal" it's a signal that your retention systems are broken.

While competitors accept declining benchmarks, operators who fix the fundamentals will compound growth faster and capture market share.

Stop managing decline. Start building retention systems that drive expansion.

The companies that figure this out will dominate the next market cycle.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintankumar Maisuria