Check This One Number Before You Spend on Growth
One founder screens agencies on a single retention number before deciding whether growth spending is worth anything at all. The number is 70%.
September 21, 2026
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1 min read
Barrel Holdings owns and backs a set of independent agencies. Peter Kang founded Barrel, watched two of the businesses run without him day to day, and built the holding company from there. He has now looked at enough agencies from the outside to have a rule about which ones are worth backing.
The rule is net revenue retention, which is simply what your existing clients spent with you this year as a percentage of what those same clients spent last year. It counts expansions and it counts losses, so a firm that keeps every logo but shrinks every budget still fails it.
He is careful to scope it, and the scoping matters as much as the threshold. The number moves with the service mix, because a retainer-heavy firm and a project-heavy firm are not taking the same test. Seventy is where he lands for a blend of the two.
Why it matters to you.
Most founders track new business and churn separately, and neither one answers the question this number answers. New business tells you what your sales effort produced. Churn tells you who left. Net revenue retention tells you what happened to the money you already had, which is the only part of next year you can see from here. The practical use is as a gate rather than a score. Below the line, a growth budget is not buying growth. It is refilling a bucket, and the firm runs hard to arrive back where it started. That is the pattern he describes: firms under the threshold tend to get back to flat, or to underperform, no matter what they spend at the top of the funnel. Above the line, the same budget compounds, because the base it lands on is still there next year. This is also the cheapest diagnostic available for a boutique. It needs no new system and no consultant. You already have every number it requires sitting in your invoicing history, and most firms have simply never put the two years side by side. One caution, a high number is not automatically good news. A firm whose retention is excellent because three clients keep growing has a concentration problem wearing a retention number as a disguise. Look at the figure, then look at how few clients produced it.
“70% NRR is where we look at, because we've typically found that if agencies have 70% NRR, then they're more likely to see growth the next year. If they're under, we've seen from our data that it's harder. They might get back to that flat level, or underperform the next year. - Peter Kang, founder, Barrel Holdings”
Your one thing.
Pull what your existing clients spent with you over the last twelve months, as a percentage of what those same clients spent the twelve months before. That is your number. Then look at next quarter's growth budget and decide whether it is buying growth or replacing losses.
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