Jason M. LemkinCEO, SaaStr · Co-Founder of SaaStr AI, SaaStr Fund, Adobe Sign

How to Increase Customer Renewals and Revenue at One Million in Revenue

14 Feb 2024 · 0 min

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Jason M. Lemkin argues that startups at about $1M in revenue should prioritize customer happiness and renewals even before many customers reach renewal timeframes. He suggests hiring customer-focused leadership (e.g., a VP of Customer) early, since modest percentage improvements in renewal/revenue (e.g., 10–20%) could yield an extra $100k–$200k—offsetting much of that hire’s cost.

You know what? A million is not too early to make your customers happy, is it? Most of us stumble because customers, especially if we sign annual contracts, they don't renew for a year, right? So by the time we get to a million, we haven't had a lot of renewals, have we? So we tend to start thinking about the VP customers who has around 3,4 million in revenue. But what if you hired her at a million and she renewed another 10 or 20% extra, got another 100 or $200,000 of money in next year? Would that cover the salary? At least a big chunk of it, yeah.