Case Studies

1. The £20-30M business intelligence company where high growth was hiding a crisis

The impact: GRR from 71% to 91%, volatile growth made sustainable, and a successful exit.

The problem

A commercial director under intense pressure showed up at a Substribe meeting with an unusual complaint.

His PE owners were obsessing over 130% NRR and wanted it maintained. The business came in at 129%, and that wasn’t enough, even though hitting the number was doing damage. Meanwhile GRR was 71%, and nobody was discussing it.

The market is small and they were its trusted connector. Losing up to 30% of the base every year, they were burning through their own addressable market while NRR evidenced expansion success to the owners. They were replacing lost customers with aggressive upsells to the ones who remained. High risk revenue that looked like growth, hidden because ARR was growing too.

The diagnosis

The important part wasn’t the position, it was the direction. Reviewing revenue by segment, by team and over time showed the trend the annual figures hadn’t caught up with. On that trajectory the GRR problem would have surfaced in the reported numbers around 18 months later, when the options would have been fewer and more expensive.

On the Substribe Performance Grid, which plots protection (GRR) against growth (NRR), they sat in the Pricing Lever quadrant. High growth on unstable foundations, and they’d been stuck there for years. Next was Critical Reboot.

One team had declining NRR. They’d been through the pricing revolution and knew to manage GRR to grow the installed base. The other team continued to maximise NRR and didn’t see they were destroying the base. Based on NRR alone, the team doing the damage looked like the better team.

The tiers said the same. Tier 1 and 2, at £5M and £10M revenue, had GRR of 71% and 77%, retention cracking under aggressive expansion. Tier 4 needed a market expansion strategy but was plundered to get expansion revenue to feed commission schemes.

With PE pressure for high NRR as their hero metric, challenging the growth narrative was career-limiting. But Substribe external analysis, combining NRR and GRR, over time and by segment, gave leadership permission to question the blinkered use of NRR alone.

The pivot

Customer success resource moved from aggressive expansion to retention in Tier 1 and 2. Commission was rebuilt across the ARR waterfall to include GRR, not expansion alone. Tier 3 moved from set and forget to active nurturing, and Tier 4 was protected from the increases.

Where it landed

Before: 129% NRR on 71% GRR. Volatile growth heading for collapse. After: 106% NRR on 91% GRR, sustainable expansion on a stable foundation.

NRR came down 23 points. That was the intention. The gap narrowed from 58 points to 15, which is what removed the volatility. The business was successfully exited. The execution was theirs. What changed was the number they were executing against.

Annual subscription results lag the decisions that caused them. Reviewing revenue by segment and team over time is how you see the change in time to act. Here that was roughly 18 months of warning. High NRR on low GRR isn’t growth, it’s replacement.