Net Revenue Retention (NRR) is a key metric that businesses use to gauge the effectiveness of their customer retention strategies and overall revenue growth. This metric helps companies understand how much revenue they are able to maintain from their existing customer base over a specific period of time. If your NRR value is greater than 100%, it means you are experiencing revenue growth from your existing customers. On the other hand, if your NRR value is less than 100%, it indicates revenue churn.

NRR takes into account various factors such as expansions, which include upsells or cross-sells, as well as contractions, which include churn or downgrades. By considering these factors, NRR provides insights into a company's ability to not only retain its existing customers but also potentially increase revenue from them👏

We use the calculation:

NRR = 100% − ((Churned MRR - Expansion MRR) ÷ Starting MRR 30 days ago x 100)

Simply put:
NRR = (100% − Net Revenue Churn)
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If a company's NRR value is greater than 100%, it signifies that the company is successfully growing its revenue from its existing customer base. This indicates a strong customer retention strategy and can be seen as a positive indicator of the company's overall growth and success. Conversely, if a company's NRR value is less than 100%, it suggests that the company is facing revenue churn. This means that the company is losing customers or experiencing downgrades in their purchases, resulting in a decrease in revenue from the existing customer base. Changes in NRR can be caused by several factors, including:

In summary, NRR is a valuable metric that allows businesses to assess their customer retention efforts and understand the impact on their revenue growth. By monitoring and analyzing NRR, companies can make informed decisions to improve customer retention strategies and drive overall business growth.