WELCOME TO ISSUE NO #066

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📆 Today’s Rundown

Hey 👋, hope you had a great week! In the last issue, we discussed why tracking Contribution Margin matters, and now we are moving with the next topic from Revenue, ARR and MRR content.

Let’s talk about ⬇️

Customer Cohort Analysis

Most Series A–C SaaS companies think they have a churn problem — but what they really have is a diagnostics problem.

They stare at topline retention dashboards…
But churn, NRR, and LTV only tell you what happened.

Cohorts tell you why.

And once you understand the why, improving net revenue retention no longer feels like guesswork — your pricing, onboarding, expansion, and CS strategy suddenly become data-backed instead of opinion-backed.

After working with scaling SaaS finance teams as a fractional CFO, I’ve found that you only need these 5 cohort insights to expose the real retention story hiding in your ARR:

TL;DR

1️⃣ Normalize Customers by Start Date (Expose the Real Behavior Patterns)

2️⃣ Run Segment Cohorts AND Time Cohorts (Dual View = Full Truth)

3️⃣ Track Inflection Points, Not Just KPIs

4️⃣ Align Sales + CS + Product to the Same Cohort Truth

5️⃣ Use Cohorts to Pressure-Test Pricing (Flat NRR is a Pricing Problem)

1️⃣ Normalize Customers by Start Date (Expose the Real Behavior Patterns)

Looking at ARR in aggregate is like looking at a hospital’s average — it hides every problem. Cohorting customers by their first contract month turns chaos into clarity.

Example:
A SaaS company sees 88% Gross Dollar Retention overall, but when normalized by start month, they see churn spikes at month 4 and month 7 for their SMB segment.
→ That instantly tells you there’s an onboarding or activation problem, not a product problem.

What to look for:

• Where does the first noticeable drop occur? (Onboarding cliff)

• When does expansion start? (Value discovery moment)

• Where do cohorts flatten? (Engagement stalls)

2️⃣ Reduce Product Delivery Costs (Support, Onboarding, CSM)

Scaling SaaS has multiple truths. Different ICPs behave differently.

• Segment Cohorts (Layer Cake View) → reveals which ICP, pricing tier, or product line actually retains

• Time-Based Cohorts (Waterfall View) → reveals how retention behaves over the lifecycle

Example:
Enterprise retains at 128% NRR (clean expansion), SMB retains at 96% (downgrades + churn).
→ Pricing and activation are not “bad” — they are segment-specific problems.

This stops leadership fights because you’re no longer arguing opinions — you’re pointing to patterns.

3️⃣ Track Inflection Points, Not Just KPIs

You don’t fix retention by looking at retention.

Fix the moments that cause retention:

• Activation milestone missed → churn at month 3–5

• Low usage by month 2 → churn at renewal

• Expansion triggers after feature adoption → drive expansion sooner

Example:
A Series B SaaS found downgrades consistently at month 11 for mid-market customers.
Cohorts revealed customers weren’t adopting the second product line, so value perception dropped before renewal.
→ CS built a “90-day expansion playbook” and NRR jumped from 103% → 117%.

4️⃣ Align Sales + CS + Product to the Same Cohort Truth

When you show cohorts, misalignment becomes obvious:

• Sales → selling the wrong tier to the wrong ICP

• CS → reactive instead of milestone-driven

• Product → shipping features that don’t influence retention

Cohorts unify teams around one scorecard: lifecycle behavior.

5️⃣ Use Cohorts to Pressure-Test Pricing (Flat NRR is a Pricing Problem)

If your cohorts retain but don’t expand, you don’t have a churn problem — you have a monetization problem.

Signs pricing is the issue:

• NRR stuck between 98%–108%

• Expansion only happening in 1 segment

• Flat cohort lines after month 6 (value capped)

Example:
One SaaS shifted from seat-based → usage-based after cohort data exposed stagnant expansion in Enterprise.
Result? Expansion revenue unlocked without increasing acquisition volume.

Need clarity on your financial strategy or cash flow optimization?

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

The Whole Point

✨ Cohorts turn retention from a reaction → into a growth strategy.
They tell you who to target, what to fix, and where to invest for the biggest NRR lift.

If you want me to build your cohort views and uncover the “why” behind your numbers, reply with one word:

“COHORT”

I’ll send the details.

Chat soon,

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