New Podcast Episode: Retention as Capital Credibility in SaaS

What are boards really evaluating when they scrutinize retention in 2026?

We’ve seen retention show up differently for boards and investors over the past year. Ellie Wu (Founder, CSuiteCX) joins our podcast this week to explore how and why retention has shifted from a tactical Customer Success issue to a board-level credibility signal shaped by leadership judgment, timing, and capital risk at moments of scrutiny.

You can listen to the episode here.

A theme that comes through clearly is the role of context. In a market where retention and expansion dynamics have shifted, benchmarking helps leaders interpret what the numbers really mean, pressure-test narratives, and avoid false confidence from stable-looking aggregates.

Key takeaways:

• Retention has not suddenly gotten worse. The rules around capital have changed.
  Boards and investors are no longer underwriting growth assumptions without evidence of durability. Retention now surfaces first as a confidence and interpretation problem, not just a revenue problem.‍
• What breaks first isn’t revenue. It’s confidence in the growth story.
  Stable NRR can mask slower expansion, increased buyer friction, and reduced forgiveness. By the time revenue declines, leadership credibility may already be under pressure.‍
• Customer friction is a systemic issue, nota CX problem.
  Friction accumulates quietly across onboarding, adoption, expansion, and renewal. It is often distributed across functions and invisible in dashboards designed to track lagging outcomes, not pressure.‍
• When CFOs lean into retention, it’s an early warning signal.
  CFO involvement often indicates retention has crossed into capital risk territory. At that point, the focus shifts from execution metrics to durability, downside exposure, and whether the narrative will hold up under diligence.‍
• Boards are assessing judgment under pressure, not metric perfection.
  The core question in the boardroom is whether leadership understands the risk clearly enough to explain it consistently and make credible decisions before uncertainty forces the issue. ‍
• Benchmarking matters because “stable” does not always mean “safe.”
  Aggregate metrics can hide cohort and segment deterioration. Benchmarks help teams separate market-wide compression from company-specific friction and avoid celebrating “at the median” when the median itself is deteriorating. ‍
• Timing matters more than optimization.
  In today’s environment, the window to diagnose and act is collapsing. Leaders who perform well catch friction early, while they still have strategic options, not after churn spikes.‍
• Retention is no longer an operational outcome.
  It has become a leadership credibility test that shapes capital decisions, valuation conversations, and board confidence heading into 2026.

‍

Transcript

Katherine Zhang:
Welcome to SaaS Conversations, a podcast from OPEXEngine by Bain & Company, where we explore the strategies behind operational excellence in SaaS. I’m Katherine Zhang, CEO of OPEXEngine, and today we’re joined by Ellie Wu, founder of CSuiteCX. At CSuiteCX, she partners with growth-stage and scaling SaaS companies on customer strategies that hold up under board and investor scrutiny.

Her perspective is shaped by deep operating experience, including driving customer strategy alongside executive teams across early and growth-stage portfolio companies at Insight Partners, as well as serving in senior leadership roles at SAP Concur and Smartsheet. Across hundreds of venture-backed and private equity-backed companies, Ellie has seen how customer friction compounds, moving from an operating concern into a capital, valuation, and credibility risk.

In today’s conversation, Ellie shares a pattern she has been seeing across her work with leaders and investors as we kick off 2026. It’s a topic that’s top of mind for many SaaS leaders and investors that both she and I have been speaking with recently, and that topic is retention. This is not a discussion about tactical churn reduction. Instead, Ellie will explore how retention shows up as a board-level credibility signal involving leadership judgment, timing, and capital risk.

So Ellie, thanks for joining us today.

Ellie Wu:
Thanks, Katherine. I’m really glad to be here. This is a conversation I’ve been having so often lately, and I’m glad we’re making space for it here today.

Katherine Zhang:
Let’s jump right in. Over the past year, retention seems to have become a much bigger concern for boards and investors. What changed?

Ellie Wu:
The biggest shift is that retention has moved from being a customer success-owned metric to a leadership credibility signal. That shift has happened because capital providers are no longer underwriting growth assumptions without evidence of durable growth.

For years, retention lived primarily in the CS organization. It was tracked and reported, but it wasn’t the central question. Growth was. As long as companies were growing, retention could lag and still be forgiven. That assumption is now breaking.

What I’m seeing across both VC-backed and PE-backed companies is that retention surfaces first as a confidence problem, not just a revenue problem. Leaders may walk into a boardroom where the numbers look fine, but there’s hesitation because the story doesn’t hold up the way it used to.

That hesitation is costly. It shows up as delayed fundraising decisions, tighter scrutiny on hiring, and new questions about runway. Retention did not suddenly get worse. The rules around capital and scrutiny changed, and retention moved into the boardroom as a credibility issue.

Many leaders are navigating renewal and retention dynamics for the first time in this type of market, where pressures are accelerated and compounded. The playbook that worked in 2021 or 2022 no longer works, and the forgiveness that once existed around retention gaps is gone.

Katherine Zhang:
If the old playbook no longer works, how should leaders think differently about retention now?

Ellie Wu:
For years, the assumption was that retention could lag and expansion would compensate. I often saw companies with gross retention in the mid to high eighties while NRR stayed above 110 percent because expansion was strong.

Leadership teams got comfortable with that model, but it was built for a market with abundant capital and a strong bias toward growth. That world has ended.

Today, retention narratives have to hold up under diligence. Boards and investors are not just asking about NRR. They’re asking how durable that growth is, what happens if expansion slows, what downside exposure looks like, and whether the customer base will still be intact 18 months from now.

Customer friction is happening now. It shows up in onboarding gaps, adoption challenges, and renewal conversations that feel harder than they used to. What has disappeared is not just forgiveness, but time. Customer friction no longer has time to resolve itself before it becomes a capital issue.

The window for intervention is collapsing. Companies performing above their peers are not just tracking retention better. They are identifying friction earlier and acting while they still have leverage.

Katherine Zhang:
You mentioned customer friction several times. What do you mean by that?

Ellie Wu:
Customer friction is often felt before it is measured. When something feels off, teams often respond by adding more metrics, dashboards, and reporting. That increases visibility, but the real issue is interpretation.

Customer friction is not a CX issue. It’s a system-level breakdown across experience, incentives, and decisions.

In practice, friction accumulates across onboarding, adoption, expansion, and renewal. It shows up as implementation delays, misalignment between product and customer workflows, stalled expansion conversations, and renewals that feel harder because trust has eroded.

Each function optimizes locally. Sales owns the deal. CS owns onboarding. Product owns the experience. Finance owns billing. Each decision makes sense in isolation, but leadership often misses how those decisions interact across the customer journey.

Katherine Zhang:
We’ve also seen CFOs get more involved in retention discussions. Why is that happening?

Ellie Wu:
When CFOs lean into retention, it’s usually because retention has crossed into capital risk territory. CFOs are stress-testing durability, downside exposure, and narrative coherence under pressure.

They are not just looking at averages. They are asking about cohorts, segments, and scenarios where expansion slows. They may be seeing payment delays or pricing pressure that do not yet show up in aggregate metrics.

Retention becomes a governance and control conversation. The CFO is assessing whether the leadership team understands the risk well enough to navigate it credibly.

Katherine Zhang:
We’ve seen in OPEXEngine data that NRR has fallen from 2021 peaks and stagnated around 100 percent. Why does expansion feel less reliable right now?

Ellie Wu:
The most common pattern I see is stagnation, not collapse. Stable NRR can mask slower expansion, longer sales cycles, more procurement involvement, and reduced forgiveness.

What breaks first is not revenue. It’s confidence in the growth story.

Benchmarking matters here. If the median drops from 110 percent to 100 percent and you are tracking the median, you are not holding steady. You are participating in the same compression.

Benchmarks help teams understand whether they are seeing market-wide shifts or company-specific friction that needs diagnosis.

Katherine Zhang:
Why do leadership teams miss this risk?

Ellie Wu:
At the board level, the focus shifts from metrics to judgment. Boards are not asking for perfection. They are asking whether leadership understands the risk clearly enough to explain it and act decisively.

Teams often over-optimize metrics while missing the real issue. The leaders who navigate this well diagnose early, prioritize clearly, and maintain credibility under pressure.

Katherine Zhang:
If there’s one takeaway leaders should leave with, what is it?

Ellie Wu:
Retention rarely fails all at once. It weakens quietly while narratives still feel reasonable.

By the time those narratives are tested, leaders may be reacting instead of choosing. The leaders who handle this well diagnose early, move decisively, and preserve leverage.

Retention is no longer an operational outcome. It’s a leadership credibility test that shapes capital decisions.

Katherine Zhang:
Ellie, thank you for joining us and helping us think about retention through this lens.

For listeners who want to continue the conversation, you can find Ellie on LinkedIn or learn more at CSuiteCX.com. She also has an executive brief titled Retention as Capital Credibility, which we’ve linked in the show notes.

Ellie Wu:
Thanks so much, Katherine.