Revenue Doesn’t Compound by Chance. It Compounds by Design.

Most revenue plans get built around one question: how do we grow faster? The harder question, and the one a board is really asking when it presses on NRR, is whether that growth is durable, or whether the business is refilling a bucket that leaks from the bottom.

We hosted a webinar around that question, Revenue That Compounds: The Customer Growth Blind Spot, because we kept running into the same story across the scaling companies we work with: a team hitting its number while a real share of the existing customer base quietly erodes underneath it. 

We were joined by Sherri Sklar, CEO of GrowthTera, and Nadya Kohl, Chief Commercial Officer at Skillyai, who brought their own operating experience to the conversation. The businesses getting this right didn’t stumble into it. They built a system that catches the problem before it shows up on a churn report.

The Signals That Get Lost in the Average

Missed signals rarely come from missing data. They come from data that’s been averaged into a single number – one clean figure standing in for two or three very different stories happening underneath it.

Sherri Sklar, a multi-time CRO across technology businesses has seen this pattern repeatedly. Revenue leaders need to track three distinct buckets – not just a blended total: new revenue, retention, and expansion. Tracking only one number can mask which bucket is growing, which is stalling, and if a churn problem is emerging.

The first blind spot: blended metrics. “You might have an NRR metric that says 100%,” Sklar says. “But when you dig in, it’s 130% for enterprise and 80% for SMB. That’s a completely different story — and a completely different strategic decision.” A blended number masks how each segment is actually performing, the critical view needed to recalibrate your GTM strategy.

The second blind spot is subtler: over-reliance on lagging indicators – bookings, quota attainment, total ARR – while ignoring the leading indicators that reveal where growth is headed. “Lagging indicators tell you what happened,” Sklar says. “Leading indicators tell you what growth will do before it shows up in the top line.” The signals worth watching: conversion rates improving, deal size expanding, ICP pipeline growing, and sales cycles compressing.

The last signal that goes unmeasured is expansion. Many companies treat it as a byproduct of good account relationships. It isn’t, and the payoff of getting it right is significant.  Customer expansion now accounts for 52% of new revenue industry-wide (EBSTA/Pavilion 2025). The motions that win new logos win expansion too.  They include sustained C-suite engagement, multi-threaded relationships across the five to eight stakeholders in a typical buying decision, and deliberate executive alignment. C-suite engagement alone can increase upsell potential by 189% (EBSTA/ Pavilion 2025). Expansion revenue doesn’t compound by accident. It compounds by design

Good Revenue, Expensive Revenue

Healthy growth isn’t only about which customers a company lands. It’s about which ones it keeps investing in, and left unchecked, that decision usually just follows momentum rather than a deliberate screening process.

Not all attrition is a point-of-failure. Product-market fit evolves, and some churn is the natural result of a business outgrowing a segment it once served well. The mistake is treating all attrition as natural when a meaningful share of it is preventable, and that difference only shows up when someone is willing to look account by account instead of settling for the aggregate number.

Sales cycles that stretch too long, margins that quietly erode, cost to deliver that no longer justifies the deal: these markers hide easily inside a growing top line. A proof-of-concept that should take two weeks can drift into a four-to-six-month black hole, and a business can be adding logos while losing money on a real share of its base, because nothing forces those two facts into the same conversation.

The fix is a standing screening process, not a renewal-week scramble:

• Put ICP-fit into the compensation plan itself, not just the pitch deck, so reps get rewarded for the right accounts rather than any account that will close.
• Review account health on a set cadence, asking whether an account’s growth is compounding or costing more than it returns, rather than waiting until a deal is already at risk.

Get that screening process right, and expensive revenue stops disguising itself as growth long before it shows up in a churn report.

Where Growth Falls Between Teams

The same pattern repeats structurally. Sales chases new logos, customer success manages tickets, marketing moves on after the deal closes, and retention and expansion fall into the space between them because no team was ever built to own either one.

Nadya Kohl pointed to the fix that mattered most across both a large enterprise and a startup: refusing to push targets down to commercial teams until the executive team agreed, explicitly, on the same top priorities. “When that clarity exists, teams stop waiting for permission and start owning the plan themselves,” she says, a small line that captures a real shift, from a team executing someone else’s plan to a team that treats the plan as its own.

That clarity only holds if incentives back it up. “No operating model can survive unaligned incentives,” Kohl adds. “If sales, marketing, and CS are measured differently, they’ll optimize differently, no matter how good the strategy deck looks.” In practice, that means pulling customer success into the sales process during the proof-of-concept instead of handing off a closed deal and putting a shared stretch goal in front of engineering, product, and revenue so all three benefit when retention or expansion beats plan.

It also means being honest about talent sooner than feels comfortable. A leader can spend far too much time trying to fix a team member who isn’t the right fit for the model, while the rest of the team quietly goes underserved. 

The companies that move on that call with clarity, rather than avoiding it out of loyalty, tend to be the same ones that build the rest of this well. None of these fixes are complicated individually. What’s hard is running all of them at the same time, which is exactly why so few companies do.

Where This Leaves You

Durable revenue isn’t the result of a harder-working team. It’s what’s left after a company decides, on purpose, to segment its signals, set a screening process for where it invests, and align incentives before goals get pushed down. The fastest progress usually comes from picking one of these three levers, fixing it with input across GTM teams – sales, customer success, marketing and product – and then moving to the next, rather than trying to overhaul all three at once.

None of it requires fundamental reorganization. It requires treating customer growth the way most businesses set out to acquire new customers. Not as a byproduct of good relationships and effort, but as something built with the same intention as anything else worth compounding.