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What Is Net Revenue Retention (NRR) vs. Gross Revenue Retention (GRR)?

Understand the difference between keeping dollars and growing dollars. Use clear cohort rules, standardized movement buckets, and dashboards that your CRO and CFO can trust.

See What Metrics Belong in a Revenue Marketing Dashboard Benchmark with the Revenue Marketing Index

GRR (Gross Revenue Retention) measures the percent of starting recurring revenue you keep from an existing cohort after churn and downgrades—expansion is excluded. NRR (Net Revenue Retention) adds expansion (upsell, cross-sell, price uplift) to show whether your existing customers grow on their own. Together, GRR shows stability; NRR shows durable growth.

Key Differences at a Glance

What they include — GRR: start ARR − churn − contraction. NRR: GRR + expansion (upsell, cross-sell, price).
What they answer — GRR: “How resilient is our base?” NRR: “How much does our base grow without new logos?”
Good ranges — GRR typically 85–95%+ by segment; NRR targets vary, with healthy 100–120%+ for strong expansion businesses.
Primary owners — GRR: CS/Support/Product for retention; NRR: CS + Product + Sales (expansion) + Pricing.
Reporting basis — Cohort by renewal window with normalized ARR/MRR, constant currency, and clear grace-period rules.
Why both matter — High NRR with weak GRR hides churn risk; strong GRR with flat NRR limits compounding growth.

NRR & GRR Formulas and Measurement

Standardize your math so leadership can compare apples-to-apples across products, segments, and regions.

Define → Normalize → Cohort → Reconcile → Report → Diagnose → Govern

  • Define policies: Movement buckets (expansion, contraction, churn), ARR/MRR basis, grace periods, reactivation rules, FX policy.
  • Normalize revenue: Constant currency; exclude one-time fees per policy; map SKUs to products and tiers.
  • Cohort the base: Use start-of-period ARR by renewal month/quarter and account hierarchy to avoid mix shift.
  • Reconcile movements: Ending Retained ARR = Start ARR − Churn − Contraction (+ Expansion for NRR).
  • Report transparently: Publish GRR, NRR, and bridges (Start → Churn/Contraction → Expansion → End) with variance notes.
  • Diagnose drivers: Slice by adoption milestones, use cases, price actions, CS health, segment, and region.
  • Govern monthly: Run a retention & expansion council to align CS, Sales, Product, and Finance on actions.

Retention & Expansion Measurement Matrix

Capability From (Ad Hoc) To (Operationalized) Owner Primary KPI
ARR/MRR Policy Inconsistent, includes one-offs Normalized subscription base; constant currency Finance Audit Pass %
Cohort Framework Static lists Rolling renewal cohorts with hierarchy rules RevOps Cohort Coverage %
Movement Tracking Free-text reasons Standard buckets & reason codes CS Ops Explained Variance %
Adoption Telemetry Logins only Feature milestones tied to renewal Product/Analytics Renewal Lift from Adoption
Executive Reporting Point-in-time slides Live dashboard with bridges RevOps/Finance Reporting Lag (days)
Forecast & Governance Gut feel Model-driven forecast & council CS Leadership NRR/GRR Forecast Accuracy

Client Snapshot: Turning Metrics into Momentum

Organizations that standardize GRR/NRR definitions and visualize movement bridges accelerate alignment and investment. Explore operational rigor and outcomes: Transforming Lead Management: How Comcast Business Optimized Marketing Automation and Drove $1B in Revenue

Ground your approach in the Key Principles of Revenue Marketing and a shared language from What Is Revenue Marketing? Pedowitz RM6 Insights.

Frequently Asked Questions about NRR & GRR

What are the formulas for GRR and NRR?
GRR = (Start ARR − Churn − Contraction) ÷ Start ARR. NRR = (Start ARR − Churn − Contraction + Expansion) ÷ Start ARR. Use cohorted, normalized ARR.
Do price increases count as expansion?
Yes—when reflected in recognized recurring revenue within the cohort’s measurement window per your pricing policy.
Should reactivations count?
Only if they occur within a defined grace period and your policy treats them as renewals; otherwise classify as new ARR to keep cohort math clean.
How often should we report NRR/GRR?
Monthly for operating cadence and quarterly for board reviews—always on the cohort’s renewal due dates, not invoice dates.
What leading indicators predict GRR/NRR?
Time-to-value, adoption milestones, breadth of use cases, executive engagement, support mix, license utilization, and champion health.

Make NRR & GRR Actionable

Stand up bridges, cohorts, and dashboards—then tie insights to renewal plays and expansion motions that compound growth.

See What Metrics Belong in a Revenue Marketing Dashboard Get the Revenue Marketing Kit
Explore More
Revenue Marketing Index Revenue Marketing Assessment (RM6) Key Principles of Revenue Marketing What Is Revenue Marketing? Pedowitz RM6 Insights Transforming Lead Management: Comcast Business Case Study

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