The technology and services industry is facing a pivotal shift. The “growth at all costs” era is over, and a renewed focus on profitability has replaced it. As businesses work to cut operational expenses while driving revenue growth, the pressure to retain customers and expand accounts has never been more significant.

At the same time, artificial intelligence (AI) is becoming a key player in revenue operations, automating processes, improving customer insights, and reshaping how companies manage renewals. However, with the rise of hybrid business models, traditional metrics like gross and net renewal rates are becoming less reliable, forcing organizations to rethink how they measure success.

What you need is a strategy that balances cost efficiency with innovative, data-driven growth to stay competitive. In this blog, we’ll explore how AI is reshaping customer growth and renewal, the challenges companies face in measuring retention, and the steps you can take to ensure long-term success in this changing environment. For the full findings, insights, and recommendations, read the full report in the TSIA Portal.

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Key Trends Shaping Customer Growth and Renewal in 2025

Three major trends are redefining how businesses approach growth and retention in 2025:

• Profitability is taking center stage: Companies are adopting a more disciplined approach to financial management, moving beyond rapid expansion to focus on sustainable, long-term gains.
• AI is transforming revenue operations: Advanced AI-powered tools automate tasks, deliver deeper customer insights, and enhance personalization across sales, marketing, and customer success teams.
• Traditional renewal metrics are losing relevance: As hybrid business models become more common, organizations can no longer rely solely on gross and net renewal rates to gauge customer retention and business health.

Related: State of Customer Growth and Renewal 2025

Balancing Cost Reduction and Revenue Growth: The Shift in Renewal Strategies

As businesses navigate a more cost-conscious era, the challenge isn’t just about cutting expenses—it’s about doing so without sacrificing revenue growth. The days of unchecked expansion have been replaced by a strategic focus on profitability, forcing companies to rethink how they allocate resources, manage renewals, and drive expansion.

This shift is particularly complex for subscription-based businesses. Maintaining recurring revenue requires continuous customer value, and balancing cost efficiency with service quality and financial sustainability. Many organizations are re-evaluating their go-to-market strategies, looking for ways to optimize revenue generation without overextending expensive sales resources.

The Changing Approach to Renewals and Expansion

To adapt, companies are shifting low-complexity renewal and upsell responsibilities away from high-cost sales executives to specialized customer success and renewal teams. This move is proving to be both cost-effective and performance-enhancing. Research shows that relying on sales account executives for medium-complexity renewals results in:

• 3X higher renewal costs compared to dedicated renewal specialists
• 10% lower net renewal rates
• Nearly 10% fewer attached upsells

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By centralizing renewal functions within customer success teams, businesses are reducing costs, improving renewal rates, and increasing upsell opportunities. This approach ensures that specialized teams—with deep customer knowledge—handle renewals more effectively than sales executives primarily focused on new business.

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As renewal strategies evolve, so do workforce structures. Companies are seeing a growing demand for roles dedicated to customer retention and expansion, while automation is taking on more routine tasks. Formal expansion programs and channel partnerships in the XaaS economy are also gaining momentum, providing lower-cost avenues for growth.

A holistic approach that combines workforce specialization, process automation, and wiser allocation of sales resources, is key for organizations looking to optimize profitability. By doing so, businesses can achieve sustainable revenue growth without inflating operational costs.

Related: The State of Customer Growth and Renewal 2025

The Role of AI in Revenue Growth: Efficiency, Insights, and Workforce Transformation

AI is actively reshaping how technology and services companies operate, improving efficiency and enhancing customer interactions. From automating contract renewals to predicting churn risk, AI is helping organizations streamline processes and make smarter, data-driven decisions.

AI Adoption in Revenue Operations

While AI adoption in revenue operations is still in its early stages—currently used by less than 25% of companies—over 75% of businesses are actively exploring AI solutions and plan to implement them in 2025. Companies are taking a multi-faceted approach to AI, using it to:

• Enhance predictive analytics: AI-driven forecasting improves accuracy in renewal probabilities and customer retention efforts.
• Boost customer service: AI-powered tools help customer success teams prioritize actions, summarize conversations, and improve response times.
• Expand sentiment analysis: Machine learning models analyze structured data to detect customer concerns and highlight potential risks before they escalate.
• Personalize marketing efforts: AI tailors outreach based on customer behavior, increasing engagement and conversion rates.

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Balancing AI’s Benefits With Workforce Changes

While AI boosts efficiency, it also raises questions about workforce transformation. Automating routine tasks in customer success and data analysis functions may reduce the need for some roles, but also frees employees to focus on more strategic initiatives. Companies that proactively reskill and upskill their workforce will be better positioned to maximize AI’s potential without disrupting employee productivity.

For renewal teams, AI is proving especially valuable by:

• Improving renewal forecasting: AI models assess customer data to predict renewal likelihood more accurately.
• Automating contract management: AI streamlines renewals and low-touch interactions, reducing manual workload.
• Enhancing customer targeting: AI-powered dashboards guide renewal specialists toward high-priority accounts, ensuring efforts are focused on the most impactful opportunities.

The Future of AI in Customer Growth

Early case studies suggest that AI-driven revenue operations can significantly expand the scope of work per renewal specialist while improving business agility. As adoption increases in 2025, organizations that leverage AI will have a competitive advantage—gaining deeper customer insights, optimizing costs, and improving retention rates.

In short, companies that balance AI integration and workforce development will turn AI’s potential into tangible business success.

Related: Using AI to Enhance Customer Expansion

Why Top-Line Renewal Rates Are No Longer Enough

For years, businesses have relied on gross renewal rates (GRR) and net retention rates (NRR) as primary customer retention and revenue growth indicators. However, these high-level metrics no longer provide a complete picture of business health in today’s increasingly complex market. With diversified product portfolios, multiple service models, and shifting customer expectations, companies need a more precise and segmented approach to renewal measurement.

The Problem With Aggregated Renewal Metrics

As XaaS strategies mature, businesses are bundling products and services in ways that make traditional renewal tracking less effective. Companies now offer a mix of:

• Hardware products with attached maintenance
• Perpetual software products with maintenance add-ons
• On-premise software subscriptions
• Cloud-based software services

These variations impact renewal rates differently. For example, a high-value technology subscription renewal for a strategic account will likely perform better than a lower-value maintenance contract renewal. Despite these variations, many businesses still report a single top-line renewal rate, which can obscure performance gaps and hidden opportunities.

A More Granular Approach to Renewal Metrics

Companies are shifting toward segmented renewal data to gain actionable insights, tracking performance across different products, business units, and customer segments. This approach helps businesses:

• Identify renewal trends: Companies can fine-tune their retention strategies by recognizing differences in renewal performance by product type, contract size, or customer segment.
• Improve forecasting and decision-making: Analyzing renewal data at a granular level provides better predictive insights into customer behavior, enabling proactive intervention.
• Benchmark against internal performance: Rather than relying solely on market comparisons, companies can track their progress and identify areas for improvement.

The Role of Bundling in Renewal Complexity

The increasing trend of bundling customer success and support services into subscription models introduces both advantages and challenges. While bundling can help drive product adoption, it also presents two key risks:

• Margin compression: When customer success and support services are included in a subscription, their value is often calculated based on cost rather than profit, limiting long-term profitability.
• Expansion headwinds: Low-complexity upsells, often linked to service add-ons, can slip through the cracks between sales and customer success teams, creating missed revenue opportunities.

The Path Forward: Smarter Renewal Strategies

To stay competitive, businesses must move beyond a one-size-fits-all renewal metric and adopt a data-driven, segmented approach. Aligning sales, marketing, customer success, and finance teams around shared renewal insights will improve retention, drive expansion, and maintain long-term profitability.

Companies that refine their renewal strategies based on deeper, more precise data will gain a stronger, more sustainable foundation for customer growth—one that isn’t dependent on outdated top-line metrics, but reflects the true health of their customer relationships.

Preparing for the Future of Customer Growth and Renewal

As the technology and services industry evolves, companies must rethink their approach to profitability, AI adoption, and renewal measurement. The shift away from “growth at all costs” has placed a dual focus on cost efficiency and revenue expansion, leading to fundamental changes in workforce management and go-to-market strategies. At the same time, AI is unlocking new opportunities for automation, predictive insights, and customer engagement, requiring organizations to balance technological advancements with workforce adaptation.

Traditional top-line renewal metrics are also losing relevance, forcing businesses to adopt more granular and strategic renewal measurements to truly understand customer retention and expansion. Those who embrace a data-driven, AI-powered, and customer-centric approach will be better positioned to navigate this transformation and drive long-term success.

Your Key Takeaways

• Profitability and efficiency are driving change: The technology and services industry is shifting away from aggressive growth strategies and focusing on cost optimization while maintaining revenue expansion. Businesses are restructuring renewal processes, moving low-complexity renewals to specialized customer success teams, and leveraging AI to enhance operational efficiency.
• AI is reshaping revenue operations: Companies increasingly turn to AI to automate renewal tasks, improve forecasting accuracy, and enhance customer interactions. While AI can drive efficiency, businesses must rethink workforce roles and invest in upskilling employees to focus on higher-value customer engagement.‍
• Traditional renewal metrics are becoming obsolete: Relying solely on gross renewal rates (GRR) and net retention rates (NRR) no longer provides a complete picture of customer retention. Businesses must adopt granular, data-driven renewal strategies by segmenting renewal performance across products, business units, and customer types. A more precise approach will drive better decision-making, retention, and revenue growth.