InsightFebruary 5, 2026

    Why Net Revenue Retention Is Falling and How the Best SaaS Teams Are Responding

    How leading SaaS companies are engineering predictable growth using AI-powered product usage analytics.

    By QuadSci Team
    Dan Harmeson discussing NRR trends with SBI Growth's Nick Toman and Craig Riley

    Recently, QuadSci co-founder and co-CEO Dan Harmeson joined SBI Growth's Nick Toman and Craig Riley to discuss how SaaS companies are engineering more predictable growth using AI-powered product usage analytics.

    The conversation helps frame an upcoming joint report from SBI and QuadSci. The research is based on analysis of 160 billion data points across 9,100 accounts.

    Untapped Potential

    Net Revenue Retention is under pressure across the SaaS market. Even strong companies are seeing declines.

    For years, growth mattered more than durability. Today, boards and operators expect profitable, predictable expansion. That shift exposes a hard truth: most SaaS companies still struggle to understand how customers actually experience value in their product.

    The good news is that software companies have a massive advantage. Every customer interaction generates data, and SaaS teams are very good at capturing it.

    The problem is that raw telemetry is noisy, volatile, and disconnected from business outcomes.

    As a result, go-to-market teams rarely trust or use it. Decisions about retention, expansion, and prioritization still rely on lagging indicators from CRMs, call notes, and anecdotal feedback. That leads to subjective judgment calls at exactly the wrong moments.

    In the episode, we discuss why usage data only becomes powerful when you look at two things together:

    • How much customers use the product
    • How consistent that usage is over time

    When you combine those dimensions, clear patterns emerge.

    Six Customer Patterns That Predict Growth or Churn

    Across thousands of accounts and billions of usage events, customers consistently fall into six behavioral cohorts.

    Every account starts as an explorer. From there, customers either progress toward healthy, durable adoption or drift toward disengagement and churn.

    These cohorts are not theoretical, and they are not static. They predict, with high accuracy, which accounts are likely to renew, expand, struggle, or churn months before traditional signals appear.

    Understanding real-time cohort shift is critical to aligning revenue teams and running the right plays. QuadSci gives sales and customer success a shared language that removes guesswork and focuses the organization on actions that prevent churn and drive growth.

    From Insight to Action

    The best companies are not just measuring retention. They are engineering it.

    They use usage patterns to:

    • Prioritize the right accounts at the right time
    • Coordinate Sales and CS around clear expansion signals
    • Guide customers toward higher-value product adoption
    • Reduce churn by intervening earlier and more precisely

    When done well, this approach reverses NRR decline and makes growth far more predictable.