A new study by SBI Growth Advisory and QuadSci has revealed a costly SaaS retention crisis, where most SaaS companies are losing ground on retention despite record spending on customer success. The study analyzed 160 billion data points across 9,100 accounts and found that solution usage alone accounts for 80% of commercial outcomes, outweighing pricing, competition, or satisfaction scores. The research identified six usage patterns that determine renewal and expansion outcomes, including Power Users, Enthusiastic Adopters, Converts, Explorers, Strugglers, and Disconnected accounts.
The study found that Net Revenue Retention (NRR) is slipping across the industry, with 58% of SaaS companies reporting lower NRR than two years ago. However, the research also showed that AI can now forecast renewal and expansion decisions with 90% accuracy up to a year in advance by tracking these usage patterns. The study’s findings suggest that growth doesn’t hinge on luck or loyalty, but rather on behavior, and that usage behavior tells the real story of commercial outcomes.
The study’s methodology involved analyzing telemetry data points tied to customer accounts, tracking usage behavior across the full lifecycle, and benchmarking NRR trends against financial documents from public subscription companies. The research has significant implications for SaaS companies, as it suggests that by leveraging AI to analyze usage behavior, they can predict and prevent churn, and improve their NRR.
The study’s findings have been endorsed by industry leaders, including Deanne Branham, Chief Customer Officer at Reltio, who noted that the AI insights are now built directly into Reltio’s platform, enabling the company to support its customers more effectively. The research suggests that SaaS companies that act on these insights now will set the pace for 2026, and that the use of AI to analyze usage behavior will become increasingly important for companies looking to improve their retention and growth.