Q2 Customer Retention Review: Executive Summary
Prepared for the executive team. Distribution: leadership only.
Executive summary
Net revenue retention held at 108% for the second consecutive quarter, but the underlying mix shifted: expansion revenue from existing accounts is up, while logo retention among sub-50-seat accounts slipped for the first time in five quarters. The small-account segment is now the primary risk to full-year targets.
Key metrics
| Metric | Q1 | Q2 | Change |
|---|---|---|---|
| Net revenue retention | 108% | 108% | flat |
| Logo retention, all accounts | 94% | 92% | -2pts |
| Logo retention, under 50 seats | 91% | 85% | -6pts |
| Expansion revenue | 2.1M USD | 2.6M USD | +24% |
| Average time to first value | 11 days | 9 days | -2 days |
Findings
- Small accounts are churning for onboarding reasons, not price. Exit surveys cite “never got the team using it” in 60% of small-account cancellations, versus 22% for enterprise cancellations.
- Expansion is concentrated. Three accounts account for 40% of Q2 expansion revenue; the median expanding account grew only 6%.
- Time-to-first-value improved, but not for the segment that needs it most. The two-day improvement is driven almost entirely by enterprise onboarding changes shipped in April; small-account time-to-value was flat.
The small-account cohort is not a pricing problem. It is an onboarding problem wearing a pricing costume.
Recommendations
- Fund a dedicated small-account onboarding flow, separate from the enterprise-calibrated one currently used for every plan tier.[1]
- Instrument “first meaningful action” per account so time-to-value is measured against something other than signup.
- Revisit the expansion-revenue concentration in Q3: three accounts carrying 40% of growth is a retention risk disguised as a win.
Appendix: methodology
Retention figures are calculated on a trailing 90-day basis and exclude accounts terminated for non-payment. Exit survey data reflects self-reported reasons at cancellation time and was not independently verified.[2]