--- title: "NRR vs GRR: Which Retention Metric to Track?" description: "NRR vs GRR for B2B teams: what each retention metric counts, the formulas with a worked example, what each hides and rules for which to act on." image: https://www.finemediabw.com/hubfs/Blog/Compound%20Growth/Awareness/NRR%20vs%20GRR%20-%20Which%20Retention%20Metric%20Should%20You%20Track/nrr-vs-grr-share-1200x630.png --- [![Fine\_Media\_logo\_Set\_HubSpot Website Logo Stacked](https://www.finemediabw.com/hubfs/Fine_Media_logo_Set_HubSpot%20Website%20Logo%20Stacked.svg "Fine_Media_logo_Set_HubSpot Website Logo Stacked")](https://www.finemediabw.com/) - Solutions - [Inbound Marketing](https://www.finemediabw.com/inbound-marketing) - [Website Design](https://www.finemediabw.com/website-design-and-development) - [Sales Enablement](https://www.finemediabw.com/sales-enablement) - [Customer Success](https://www.finemediabw.com/customer-success) - [HubSpot Services](https://www.finemediabw.com/hubspot-services) - [Insights](https://www.finemediabw.com/blog) - [About](https://www.finemediabw.com/about-us) Show submenu for About - [About us](https://www.finemediabw.com/about-us) - [Meet the Team](https://www.finemediabw.com/our-team) - [Our Story](https://www.finemediabw.com/our-story) - Solutions - [Inbound Marketing](https://www.finemediabw.com/inbound-marketing) - [Website Design](https://www.finemediabw.com/website-design-and-development) - [Sales Enablement](https://www.finemediabw.com/sales-enablement) - [Customer Success](https://www.finemediabw.com/customer-success) - [HubSpot Services](https://www.finemediabw.com/hubspot-services) - [Insights](https://www.finemediabw.com/blog) - [About](https://www.finemediabw.com/about-us) Show submenu for About - [About us](https://www.finemediabw.com/about-us) - [Meet the Team](https://www.finemediabw.com/our-team) - [Our Story](https://www.finemediabw.com/our-story) - [Contact us](https://www.finemediabw.com/contact) - [Contact us](https://www.finemediabw.com/contact) ![NRR vs GRR: Which Retention Metric Should You Track? Dark type on a pale blue-grey ground, Propello.](https://www.finemediabw.com/hubfs/Blog/Compound%20Growth/Awareness/NRR%20vs%20GRR%20-%20Which%20Retention%20Metric%20Should%20You%20Track/nrr-vs-grr-share-1200x630.png) Oct 15, 2026, 10:24:46 PM | [Compound Growth](https://www.finemediabw.com/blog/tag/compound-growth) # NRR vs GRR: Which Retention Metric Should You Track? NRR vs GRR for B2B teams: what each retention metric counts, the formulas with a worked example, what each hides and rules for which to act on. Share - [mailto:?&subject=NRR%20vs%20GRR:%20Which%20Retention%20Metric%20Should%20You%20Track?&body=NRR%20vs%20GRR:%20Which%20Retention%20Metric%20Should%20You%20Track?%0A(https%3A%2F%2Fwww.finemediabw.com%2Fblog%2Fnrr-vs-grr)](mailto:?&subject=NRR%20vs%20GRR:%20Which%20Retention%20Metric%20Should%20You%20Track?&body=NRR%20vs%20GRR:%20Which%20Retention%20Metric%20Should%20You%20Track?%0A(https%3A%2F%2Fwww.finemediabw.com%2Fblog%2Fnrr-vs-grr)) - - - If you lead finance, revenue operations, customer success or growth at a B2B subscription company, the short answer is to track both. Net revenue retention (NRR) shows whether your existing customers are growing your revenue. Gross revenue retention (GRR) shows how much of that revenue you keep before any growth. For the full picture, read our complete guide to [growth model](https://www.finemediabw.com/blog/compound-growth-model). Neither number is better. They answer different questions, and either one alone can mislead. This article sets NRR vs GRR side by side on the same criteria, shows both formulas with an illustrative example, and ends with decision rules for which one to act on first.   | **Net Revenue Retention** Net revenue retention is the share of recurring revenue from a starting group of customers that remains a year later, counting upsells, cross-sells and price increases as well as losses. | | --- |   | **Gross Revenue Retention** Gross revenue retention is the share of recurring revenue from a starting group of customers that remains a year later, counting only losses, so it can never exceed 100%. | | --- | ## Net revenue retention counts expansion, and gross revenue retention does not ![Two overlapping groups, net retention and gross retention, sharing one starting cohort.](https://www.finemediabw.com/hs-fs/hubfs/Blog/Compound%20Growth/Awareness/NRR%20vs%20GRR%20-%20Which%20Retention%20Metric%20Should%20You%20Track/cg03-nrr-grr-same-cohort-venn-blog-1600x900.png?width=1600&height=900&name=cg03-nrr-grr-same-cohort-venn-blog-1600x900.png) Both metrics start from the same place: the recurring revenue you had from a fixed group of customers at the start of a period. They differ in what they let back in. Customer retention is the wider idea. Revenue retention is the dollar version of it, and it is the version that finance, boards and customer success leaders use to judge the health of the existing customer base. SaaS Capital, a lender to private software companies, defines net retention as the monthly recurring revenue in December 2024 only from customers who were customers in December 2023, divided by total monthly recurring revenue in December 2023. Its annual survey of private B2B companies follows a cohort over time in the same way. Gross retention uses the same formula but excludes upsells, cross-sells and price increases. SaaS Capital's shortcut is to cap each customer's later revenue at what that customer paid at the start. For that reason, gross retention cannot exceed 100%, while net retention can run well above it. ### How to calculate gross revenue retention Pick a start date and list every customer paying then. Add up their monthly recurring revenue. Twelve months later, look at what the same customers pay. For the gross revenue retention rate, count the recurring revenue retained from those customers, with no one counted above what they paid at the start. Divide the revenue retained by the starting recurring revenue. Gross revenue retention tells you how much of your existing revenue survived. ### How to calculate net revenue retention Use the same start date and the same customers. To calculate net revenue retention, count everything those customers now pay, including upgrades, cross-sells and price increases, and divide by the same starting figure. The net revenue retention formula includes expansion revenue, so it counts revenue gained as well as revenue lost. Some teams say net dollar retention, or net retention rate, for the same idea. Confirm how each source defines it before you compare numbers. ### A worked example with illustrative numbers Take a cohort that paid $100,000 in monthly recurring revenue a year ago. These numbers are invented to show the arithmetic. - Customers who left took away $6,000. - Customers who downgraded took away $4,000. - Customers who upgraded or bought more added $15,000. GRR is $100,000 minus $10,000 in lost revenue, divided by $100,000: 90%. NRR is $100,000 minus $10,000 plus $15,000, divided by $100,000: 105%. A GRR of 90% means 10% of the starting revenue was lost to churn and downgrades. An NRR above 100% means the existing customer base grows revenue even before any new customer acquisition. The gap between them, 15 points, is the expansion. New customers who joined during the year appear in neither number. Both metrics follow the starting cohort only, so neither one measures new customer acquisition. ### Revenue retention is not the same as logo retention Logo retention counts customers, not dollars. A company can keep nine customers in ten and still lose a quarter of its revenue if the one who left was its largest account. Revenue retention weights each customer by what it pays, which is why finance and customer success teams lean on it. ## NRR and GRR compared on the same criteria ![A table comparing net and gross retention on what each counts, its ceiling, the question it answers and its best use, with best use highlighted.](https://www.finemediabw.com/hs-fs/hubfs/Blog/Compound%20Growth/Awareness/NRR%20vs%20GRR%20-%20Which%20Retention%20Metric%20Should%20You%20Track/cg03-nrr-vs-grr-matrix-blog-1600x900.png?width=1600&height=900&name=cg03-nrr-vs-grr-matrix-blog-1600x900.png) Both metrics measure the same cohort. They split on what they count and what they are for. | Criterion | Net revenue retention | Gross revenue retention | | --- | --- | --- | | What it counts | Churn, downgrades and expansion | Churn and downgrades only | | Formula | Starting revenue, minus losses, plus expansion, divided by starting revenue | Starting revenue, minus losses, divided by starting revenue | | Can it exceed 100% | Yes | No | | Question it answers | Is the installed base growing on its own? | How much of the base do we keep? | | What it hides | Churn that expansion covers up | Any growth from existing customers | | Best use | Judging growth from the base and the expansion motion | Judging revenue stability, product fit, onboarding and service quality | The last two rows are our reading, not a standard. Teams define expansion differently, so write down what your NRR includes before comparing it with anyone else's. ## Each metric hides a problem the other one shows The two numbers can tell opposite stories about the same business. That is the strongest reason to track both. ### NRR can hide customer churn behind expansion Imagine two companies, each starting the year with $100,000 in recurring revenue from a cohort. Again, these numbers are illustrative. | | Company A | Company B | | --- | --- | --- | | Revenue lost to churn and downgrades | $20,000 | $4,000 | | Revenue added by expansion | $30,000 | $8,000 | | GRR | 80% | 96% | | NRR | 110% | 104% | Company A has the better NRR and the weaker business underneath. A fifth of its starting revenue walked out, and a few large upgrades covered the hole. If those upgrades slow, NRR falls fast. Company B grows more slowly but suffers far less revenue churn. Our guide to [how to reduce customer churn](https://www.finemediabw.com/blog/reduce-customer-churn) covers the fixes that move GRR. ### GRR can hide a missed expansion opportunity A healthy GRR says customers stay. It says nothing about whether they buy more. A company with 96% GRR and 96% NRR is keeping its customers and selling them nothing further. That may be a pricing, packaging or account management gap, not a retention problem. Only NRR shows it. ### What the gap between the two numbers tells you Subtract GRR from NRR, using the same period for both. In an August 2023 analysis, SaaS Capital found the average gap was a bit more than twelve percentage points, and called a range of 8 to 20 points fairly normal. It describes a gap under 5 points as a strong sign that upsell and cross-sell are weak. A gap over 20 points is not necessarily unhealthy, but it is somewhat abnormal. A gap above 30 points is rare, and SaaS Capital says it usually signals a one-off, such as losing a big customer, or a go-to-market strategy that is highly imbalanced. Use the gap as a sanity check on your numbers, then ask whether expansion comes from many customers or from a few big upgrades. ## Why revenue retention matters more than a customer count Customer retention tells you how many people stayed. Gross revenue retention tells you how much revenue you retained, and net revenue retention tells you how much more revenue your existing customers generate once expansion is counted. Together, the two revenue retention measures show how much of the recurring revenue you already earned is still there. Existing customers are the one part of the revenue base you can observe directly. You can see whether they stay, whether they grow and where they leave. That makes gross revenue retention and net revenue retention useful for planning, because both describe revenue you already know about instead of revenue you hope to win. This is why gross revenue retention is important beyond finance. A business strategy that depends on additional revenue from existing clients needs a way to retain customers, and a way to see how much existing revenue each revenue stream keeps. Both measures give a view of that. Both are revenue metrics, and the key differences between them decide how you use them. Retention strategies aimed at existing customers protect retained revenue and show up in gross revenue retention. Customer success efforts and account plans that expand revenue from existing customers show up in the net revenue retention rate and in overall revenue growth. Customer value sits behind both numbers, because the customer base you keep is the customer base you can grow. Neither measure explains why customers behave as they do. Treat the numbers as prompts for questions to your customer success team, your sales team and your customers. ## Benchmarks help only when you compare like with like SaaS Capital's September 2025 benchmark report is a useful reference because it states its definitions. For companies with an average annual contract value of $25,000 to $50,000, it reports a median net revenue retention of 102%, a top quartile of 111% and a lowest quartile of 97%. The same report notes that higher net retention correlates with higher contract values. A SaaS company selling a small monthly plan should not hold itself to the figures for a large annual contract. It also reports that, across companies with more than $1 million in annual recurring revenue, the median growth rate was 24%. Groups with NRR of at least 110% grew faster than that median, and groups below 100% grew slower. That is a correlation in one survey, not a promise that raising NRR will raise your revenue growth. Use a benchmark to see where you stand, not to set a target. Compare your own trend quarter by quarter on the same definition. Our guide to [expansion revenue](https://www.finemediabw.com/blog/expansion-revenue) explains the part of NRR that GRR leaves out. ### What is a good gross retention rate? It depends on what you sell. The same report finds the link between contract value and gross retention more nuanced than the link for net retention, and says companies with the very highest contract values have the highest gross retention. Higher-priced solutions often involve longer sales cycles, in-depth scoping and dedicated support. In its 2023 analysis of the gap, SaaS Capital called gross retention already quite healthy at 90% or more for enterprise software, or 80% or more for small and mid-sized business software. So judge your gross retention rate against companies with a similar selling price, and against your own history. ## Four rules for deciding which metric to act on ![One route through four rules in two stages: read the signal from the two metrics, then report both with the cohort stated.](https://www.finemediabw.com/hs-fs/hubfs/Blog/Compound%20Growth/Awareness/NRR%20vs%20GRR%20-%20Which%20Retention%20Metric%20Should%20You%20Track/cg03-nrr-grr-decision-path-blog-1600x900.png?width=1600&height=900&name=cg03-nrr-grr-decision-path-blog-1600x900.png) Choose by the problem in front of you, not by which number looks better in a board deck. These rules are our reading and are meant to be argued with. ### If GRR is falling, fix retention before you chase expansion Selling more to customers who are leaving is a poor trade. Start with onboarding, support and product fit, and watch GRR first. ### If GRR is steady and NRR is flat, look at expansion Customers stay but do not grow. Review packaging, pricing and how account owners spot the next need. ### If NRR is rising while GRR is falling, treat it as a warning Expansion is covering a leak. Find out which segments are churning and why before the upgrades slow. ### If you report one number, report both with the cohort stated Give the starting date, the customer group and what counts as expansion. A single percentage with no definition invites the wrong conclusion. ## How to improve both retention metrics without fooling yourself Improving a retention metric starts with knowing which part of it moves. Break revenue lost into churn and downgrades, and expansion into upgrades, cross-sells and price increases, then review each by customer segment. To improve gross revenue retention, review where customers leave: onboarding, adoption, customer satisfaction, support and fit at the point of sale. To improve net revenue retention, review the expansion side as well. Which expansion strategies fit this customer base, what could customers buy next, and who owns that conversation? A price increase lifts NRR on paper, so report it as its own line. Keep the same cohort definition from one period to the next, because changing it mid-year makes the trend meaningless. Retention efforts work best when sales, marketing and customer success share one set of definitions and one record of each account. Customer feedback and customer loyalty signals belong in that record too. ## What you gain when this is done properly Reading both numbers together turns retention from a report into a set of decisions that each team can act on. It also gives you a clearer view of your company's ability to grow from the customers it already has. ### Sales gets a clearer view of the accounts worth growing When GRR is healthy and NRR is flat, sales knows the base is stable and the open question is expansion. That points account owners toward the right conversations and more revenue from valuable clients. ### Marketing gets honest proof of which segments stay Retention by segment shows which customers stay and grow. Marketing can aim campaigns at the segments that keep their revenue instead of those that churn, and weigh customer lifetime value against acquisition effort. ### Customer success gets a target it can influence GRR tracks the work the customer success team does most directly: onboarding, adoption and service. A separate expansion measure shows its contribution to business health and account growth without hiding churn. ## Read both numbers together, then fix what the gap shows The gap between NRR and GRR is your expansion. The distance of GRR from 100% is your leakage. Together they describe how an installed base compounds or shrinks. Propello designs and builds connected go-to-market systems on HubSpot, and Propello is a [HubSpot partner](https://www.finemediabw.com/about-us). Retention numbers only help when sales, marketing and customer success work from the same definitions. If you want a second opinion on how your go-to-market systems record churn and expansion, an audit is the place to start. [Book a Propello GTM Audit](https://www.finemediabw.com/contact) ## Frequently asked questions What is the difference between NRR and GRR? NRR counts expansion from upsells, cross-sells and price increases along with churn and downgrades. GRR counts only the losses, so it excludes expansion and cannot exceed 100%. Both follow the same starting group of customers over the same period, usually twelve months. Can net revenue retention be higher than 100%? Yes. When expansion revenue from existing customers is larger than the revenue lost to churn and downgrades, NRR rises above 100%. Gross revenue retention cannot do this, because it leaves expansion out. An NRR above 100% means the starting cohort pays more than it did. Which is more important, NRR or GRR? Neither wins alone. GRR shows whether customers stay, and NRR shows whether the base grows. Look at GRR first when churn is the concern. Look at NRR when you want to judge the expansion motion. Reading them together exposes problems that one number hides. How do you calculate NRR and GRR? Start with recurring revenue from a fixed group of customers. For GRR, subtract revenue lost to churn and downgrades, then divide by the starting revenue. For NRR, also add expansion revenue before dividing. New customers who joined after the start are excluded from both. Does GRR include new customers? No. Both metrics follow only the customers who were there at the start of the period. New customers who join during the year are left out of GRR and NRR alike, so neither number measures how well you acquire customers. ![Tumisang Bogwasi](https://app.hubspot.com/settings/avatar/77d7e2eaad8ff71b24463dcc39a31e9e) ### Written By: Tumisang Bogwasi Tumisang Bogwasi is the founder and CEO of Propello, a HubSpot partner that designs and builds connected go-to-market systems. [mailto:tumib@finemediabw.com](mailto:tumib@finemediabw.com) ## You May Also Like ### [![Net Revenue Retention Formula: How to Measure Compound Growth. 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[Legal Notice](https://www.finemediabw.com/user-agreement) | [Privacy Policy](https://www.finemediabw.com/privacy-policy)  ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Tumisang Bogwasi", "url" : "https://www.finemediabw.com/blog/author/tumisang-bogwasi" }, "datePublished" : "2026-10-15T20:24:46.000Z", "headline" : "NRR vs GRR: Which Retention Metric to Track?", "image" : [ "https://www.finemediabw.com/hubfs/Blog/Compound%20Growth/Awareness/NRR%20vs%20GRR%20-%20Which%20Retention%20Metric%20Should%20You%20Track/nrr-vs-grr-share-1200x630.png" ], "mainEntityOfPage" : { "@id" : "https://www.finemediabw.com/blog/nrr-vs-grr", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.finemediabw.com/hubfs/Fine_Media_logo_Set%20copy_HubSpot_Logo_Long_Stacked.svg" }, "name" : "Fine Media" } } ``` ```json { "@context" : "https://schema.org", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "NRR counts expansion from upsells, cross-sells and price increases along with churn and downgrades. GRR counts only the losses, so it excludes expansion and cannot exceed 100%. Both follow the same starting group of customers over the same period, usually twelve months." }, "name" : "What is the difference between NRR and GRR?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Yes. When expansion revenue from existing customers is larger than the revenue lost to churn and downgrades, NRR rises above 100%. Gross revenue retention cannot do this, because it leaves expansion out. An NRR above 100% means the starting cohort pays more than it did." }, "name" : "Can net revenue retention be higher than 100%?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Neither wins alone. GRR shows whether customers stay, and NRR shows whether the base grows. Look at GRR first when churn is the concern. Look at NRR when you want to judge the expansion motion. Reading them together exposes problems that one number hides." }, "name" : "Which is more important, NRR or GRR?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Start with recurring revenue from a fixed group of customers. For GRR, subtract revenue lost to churn and downgrades, then divide by the starting revenue. For NRR, also add expansion revenue before dividing. New customers who joined after the start are excluded from both." }, "name" : "How do you calculate NRR and GRR?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "No. Both metrics follow only the customers who were there at the start of the period. New customers who join during the year are left out of GRR and NRR alike, so neither number measures how well you acquire customers." }, "name" : "Does GRR include new customers?" } ] } ```