What are NRR and GRR?
Net Revenue Retention (NRR) measures the percentage of recurring revenue retained from existing customers, including upgrades, downgrades, and churn. It reflects how much your revenue is growing or shrinking from your existing customer base. (positive impact)
NRR is the opposite of Net Revenue Churn, which measures the percentage of revenue lost due to churn and downgrades. It accounts for net losses after any upsells or expansions. (negative impact)
Gross Revenue Retention (GRR) measures how much revenue you retain from your existing customers without considering expansion revenue from upgrades. It focuses purely on churn and downgrades. (positive impact)
GRR is the opposite of Revenue Churn, which measures the percentage of revenue lost due to downgrades and cancellations. (negative impact)
An easy way to think about it is:
NRR: How well do you sell to current customers? Are you upselling successfully or offering discounts to maintain the relationship?
GRR: How well do you keep your customers happy? Is the monthly revenue retained stable?
How are NRR and GRR calculated?
Both metrics are calculated on a rolling 30-day basis.
Net Revenue Retention (NRR):
NRR = 100% − ((Churned MRR - Expansion MRR) ÷ MRR 30 days ago x 100)
Gross Revenue Retention (GRR):
GRR = ((MRR 30 days ago – Churned MRR) ÷ MRR 30 days ago) x 100
Where can I find my NRR and GRR in Baremetrics?
Which is more important, NRR or GRR?
It depends on what you're trying to measure!
NRR is more important when you're focused on growth from existing customers. Since NRR includes expansion revenue from upgrades or additional purchases, it's a great indicator of how well your business grows from your current customer base.
A high NRR (over 100%) means your business is growing revenue even after accounting for churn, as you're gaining more from expansions than you're losing from downgrades or cancellations.
If your business has strong upsell or cross-sell opportunities (like tiered plans or add-ons), NRR is critical for understanding overall customer value.
NRR is generally the more important metric for businesses aiming for revenue growth from their existing customer base.
GRR is more important when you're focused on pure retention. GRR excludes expansion revenue and concentrates solely on retaining the revenue you already have from existing customers before any upsells or add-ons. It shows how much revenue is being lost due to churn or downgrades.
A high GRR means you are successfully retaining your core revenue, which often reflects good customer satisfaction and loyalty.
GRR clearly shows customer retention for businesses with fewer upsell opportunities or where retaining existing customers is crucial.
GRR is crucial for maintaining a strong, stable customer base and ensuring steady core revenue.
Help! My retention is low! What do I do?
If your GRR is lower than desired or your NRR isn't showing positive growth, don’t panic! There are ways to improve retention and expand revenue:
Focus on customer success: Ensure your customers are happy and receiving the full value of your product.
Upsell opportunities: Identify where customers can upgrade to a higher tier of service or purchase additional features.
Prevent churn: Use tools like Cancellation Insights and Recover to identify at-risk customers and take action before they churn.
Notes
Net Revenue Retention (NRR) is also known as Net Dollar Retention (NDR).