Gross Revenue Retention (GRR) vs Net Revenue Retention (NRR)
1. What is Gross Revenue Retention?
Gross Revenue Retention (GRR) measures how much recurring revenue a SaaS company retains from existing customers over a specific period — excluding any expansion revenue, but including downgrades and churn. It shows how well you retain your base revenue without relying on upsells or cross-sells.
2. Why is GRR important?
How is GRR different from Net Revenue Retention (NRR)?
GRR only includes churn and downgrades. It tells you how well your product delivers consistent value and whether you’re losing customers or revenue over time. In contrast, NRR includes expansion — upgrades, upsells, and additional seats — and can stay high even if you’re churning small customers.
| Metric | Includes Expansion? | Includes Downgrades & Churn? | Use Case |
|---|---|---|---|
| GRR | No | Yes | Core customer retention health |
| NRR | Yes | Yes | Revenue growth from existing base |
What’s the formula for GRR?
GRR = (Recurring Revenue at Start - Downgrades - Churn) / Recurring Revenue at Start
For example, if you started the month with $100,000 in MRR and lost $10,000 to churn and $5,000 to downgrades, your GRR would be:
($100,000 - $10,000 - $5,000) / $100,000 = 85%
What’s a good GRR benchmark?
- For SaaS businesses: 90–95% GRR is considered strong
- Anything below 85% indicates significant churn or contraction that should be addressed
Why does GRR matter more than NRR for early stage CS teams?
GRR gives you a clean view of how well you retain the value you already sold. It avoids being skewed by one or two big upsells and helps CS teams focus on value delivery, onboarding, and reducing silent churn.
FAQ
Can GRR be above 100%?
No — GRR does not include any expansion, so the maximum is 100%.
How does GRR impact valuation?
Investors look at GRR as a true measure of retention quality. A high GRR signals that customers find consistent value without needing to expand.
Should I track both GRR and NRR?
Yes. NRR shows overall growth, but GRR shows customer retention. Healthy SaaS businesses aim for both to be strong.
What’s the fastest way to improve GRR?
Double down on onboarding, customer education, and catching disengagement early. Tools like Customerscore.io can help track usage drops and trigger proactive outreach.