Single Digit Members
The Single Digit Growth Club: A Surge in New Members What Do Salesforce and Asana Have in Common? Both Salesforce and Asana: They have now joined the ranks of The Single Digit Growth Club, projecting growth below 10% for the coming year. It Wasn’t Supposed to Be This Way Why not? Mainly due to historically high Net Revenue Retention (NRR). Salesforce traditionally maintained an NRR well above 110%. Asana, despite catering to many SMBs (where high NRR is harder to achieve), also had high NRR until recently. With an NRR of 110%, growth expectations were typically around 20%-30% annually. With an NRR of 120% or more, as many companies had until recently (and some, like Databricks, still have at 140%+), 40% annual growth seemed attainable even at $1B ARR. However, while NRR is still strong, often at least 100%, it is no longer overperforming in many cases. Even high fliers like Monday.com have seen dips in NRR. Despite their smaller deal sizes, Monday.com’s NRR is the lowest it has been in over four years. The Impact of NRR Declines A drop of 10%-20% in NRR is significantly hampering growth, pushing even market leaders into The Single Digit Growth Club. But not everyone is struggling. The Haves and Have Nots in SaaS In today’s SaaS landscape, there is a stark contrast between the Haves and the Have Nots. Companies operating outside of B2B, those that are truly AI-native, and others are experiencing remarkable growth. However, within tech sales, a decline in NRR is severely impacting growth. Conclusion The shift to single-digit growth is a reality many SaaS companies are grappling with. As we navigate this new landscape, it’s clear that maintaining high NRR and adapting to market changes are crucial for sustaining growth. Like Related Posts Salesforce OEM AppExchange Expanding its reach beyond CRM, Salesforce.com has launched a new service called AppExchange OEM Edition, aimed at non-CRM service providers. Read more The Salesforce Story In Marc Benioff’s own words How did salesforce.com grow from a start up in a rented apartment into the world’s Read more Salesforce Jigsaw Salesforce.com, a prominent figure in cloud computing, has finalized a deal to acquire Jigsaw, a wiki-style business contact database, for Read more Health Cloud Brings Healthcare Transformation Following swiftly after last week’s successful launch of Financial Services Cloud, Salesforce has announced the second installment in its series Read more
