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Metrics & Analytics

Gross Revenue Retention (GRR)

The percentage of recurring revenue retained from existing customers, excluding any expansion revenue.

Definition

Gross Revenue Retention measures how much recurring revenue you keep from existing customers, accounting for churn and contraction but ignoring expansion. Unlike Net Revenue Retention which can exceed 100%, GRR has a ceiling of 100%. It tells you how well you retain existing revenue before any growth efforts.

Why It Matters

GRR is a pure measure of revenue retention without the masking effect of expansion. High NRR with low GRR means you are growing existing customers but also losing them. GRR reveals the underlying health of your customer base. Strong retention (high GRR) creates a stable foundation for growth. Weak retention (low GRR) means you are running to stand still.

How It Works

Calculate GRR by taking starting MRR minus churn and contraction, divided by starting MRR. Do not add expansion revenue. If you start with $100K MRR, lose $5K to churn and $3K to downgrades, your GRR is ($100K - $5K - $3K) / $100K = 92%.

Best Practices

  • 1Track GRR separately from NRR to understand true retention
  • 2Target GRR above 90% for healthy SaaS businesses
  • 3Investigate GRR drops immediately as they compound
  • 4Use GRR to evaluate product-market fit independent of sales
  • 5Analyze GRR by cohort to understand retention trends
  • 6Build email programs focused on preventing churn and contraction
  • 7Balance expansion efforts with retention fundamentals

Retention Email Automation

Build email sequences focused on preventing churn and contraction. Sequenzy helps you identify at-risk subscribers and intervene early.

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Frequently Asked Questions

Enterprise SaaS often achieves 95%+ GRR. SMB SaaS typically targets 85-95%. Below 80% is concerning and suggests fundamental retention problems. Higher GRR means less pressure on acquisition and expansion to maintain growth.

GRR only counts losses (churn and contraction). NRR includes both losses and gains (expansion). GRR caps at 100% while NRR can exceed 100%. Think of GRR as your baseline retention and NRR as retention plus growth.

Focus email on preventing losses. Improve onboarding to reduce early churn. Send re-engagement campaigns for declining usage. Build excellent dunning for failed payments. Proactively reach out to at-risk accounts. GRR improvement is about keeping what you have.