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Metrics & Analytics

Net Revenue Retention (NRR)

The percentage of recurring revenue retained from existing customers, including expansion and contraction.

Definition

Net Revenue Retention measures how much revenue you keep and grow from your existing customer base over a period, typically measured monthly or annually. It accounts for expansion revenue (upgrades, add-ons), contraction (downgrades), and churn. An NRR above 100% means your existing customers are spending more over time even without acquiring new ones.

Why It Matters

NRR above 100% means your business can grow even if you stop acquiring new customers. It is one of the most important metrics for SaaS valuations. From an email perspective, NRR is directly influenced by your upgrade emails, usage-based nudges, and retention sequences. Every expansion email that works and every churn you prevent improves NRR.

How It Works

Calculate NRR by taking starting MRR from a cohort, then after a period (usually 12 months), divide ending MRR from that same cohort by the starting MRR. If you started with $100k MRR from a customer cohort and a year later those same customers generate $110k, your NRR is 110%. This includes customers who churned, downgraded, or upgraded.

Best Practices

  • 1Track NRR by customer segment to find your best-fit markets
  • 2Use email to drive expansion with usage-based upgrade prompts
  • 3Send proactive emails to at-risk accounts before they churn
  • 4Measure email campaign impact on NRR, not just conversions
  • 5Focus on customers with expansion potential for upsell sequences
  • 6Build email triggers for usage thresholds that indicate upgrade readiness

Expansion Email Automation

Trigger upgrade prompts when customers hit usage thresholds. Sequenzy tracks subscription data from Stripe to help you drive expansion revenue.

Learn More

Frequently Asked Questions

For B2B SaaS, 100% is the baseline. Good companies hit 105-115%. The best companies achieve 120-140%+. B2C and SMB-focused products typically have lower NRR (80-100%) due to higher churn. Enterprise SaaS often exceeds 120% due to expansion within accounts.

Gross Revenue Retention (GRR) only counts contraction and churn, ignoring expansion. It can never exceed 100%. NRR includes expansion, so it can exceed 100%. GRR tells you how well you keep customers. NRR tells you how well you grow them.

Email impacts both sides of NRR. Retention emails reduce churn and contraction. Expansion emails drive upgrades and add-on purchases. Usage-based triggers that prompt upgrades when customers are ready are particularly effective for improving NRR.