Net Logo Retention
Healthy B2B SaaS maintains 85-95% net logo retention. Below 80% indicates a product-market fit issue that expansion revenue cannot mask (ChartMogul 2024).
💡TL;DR
Net Logo Retention = (Starting customers - Churned + New from existing) / Starting customers. Example: 100 customers, 10 churned, 3 referrals from existing = (100-10+3)/100 = 93%. Benchmarks: 85-95% is healthy, <80% is concerning. Logo retention matters because each customer is a potential expansion opportunity. High NRR with low logo retention means you're dependent on a shrinking customer base.
Definition
The percentage of customers retained over a period, accounting for new logos added from existing accounts (referrals, subsidiaries). Net Logo Retention = (Starting Logos - Churned Logos + New Logos from Existing) ÷ Starting Logos. Unlike NRR which tracks revenue, net logo retention tracks customer count.
🏢What This Means for SMB Teams
SMB SaaS typically has lower logo retention (75-85%) due to higher churn from small business closures and budget constraints. Focus on identifying at-risk logos early rather than comparing to enterprise benchmarks.
Track MRR, churn, CAC payback—AI acts when metrics slip.
Metrics that matter, actions that move them.
📋Practical Example
A 40-person CRM startup ($6M ARR) celebrated 115% NRR but had only 78% logo retention. Analysis showed: they were losing 22% of customers annually but masking it with expansion from remaining accounts. When three large accounts churned in Q3, ARR dropped 18% in one quarter. They shifted focus to logo retention: implemented health scoring, proactive outreach at 60-day inactivity, and QBRs for all accounts >$10k. After 9 months, logo retention improved to 88%, creating a more stable revenue base.
🔧Implementation Steps
- 1
Track starting logo count at period start (customers, not revenue).
- 2
Count churned logos: cancellations, non-renewals, and failed payment churns.
- 3
Count new logos from existing: referrals, subsidiaries, sister companies.
- 4
Calculate: (Starting - Churned + New from Existing) / Starting × 100%.
- 5
Compare to NRR—large gaps indicate over-reliance on expansion revenue.
❓Frequently Asked Questions
How is net logo retention different from gross logo retention?
Gross logo retention = (Starting - Churned) / Starting. It only counts losses. Net logo retention adds back new logos from existing customers (referrals). Net is typically 3-8 points higher than gross.
Should we prioritize NRR or logo retention?
Both matter. NRR shows revenue efficiency, logo retention shows customer health. If NRR is high but logo retention is low, you're vulnerable—losing many customers but relying on a few expanding. Balance both.
⚡How Optifai Uses This
Optifai tracks both logo and revenue retention, alerting when gaps exceed 20 percentage points. Churn risk scoring helps identify at-risk logos before they cancel.
📚References
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Related Terms
Logo Churn vs Revenue Churn
Two related but distinct churn metrics. Logo Churn (customer churn) measures the percentage of customers who cancel. Revenue Churn measures the percentage of revenue lost to cancellations and downgrades. They often differ significantly based on which customer segments churn.
NRR (Net Revenue Retention)
The percentage of recurring revenue retained from existing customers after accounting for expansion, contraction, and churn. NRR = (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100. NRR >100% means you grow even without new customers.
GRR (Gross Revenue Retention)
The percentage of recurring revenue retained from existing customers, excluding expansion revenue. GRR = (Starting MRR - Churned MRR - Contraction MRR) / Starting MRR. Unlike NRR, GRR cannot exceed 100% because it only measures retention, not growth.
Churn Risk Signals
Behavioral indicators that predict customer churn before it happens. Common signals include: declining login frequency, reduced feature usage, support ticket spikes, NPS score drops, billing page visits, and engagement with competitor content. Early detection enables proactive intervention.