sales
NRR (Net Revenue Retention)
Same as Net Revenue Retention - how much existing customer revenue grows or shrinks year over year.
Definition
NRR (Net Revenue Retention) measures the year-over-year change in revenue from the existing customer base - including expansion (upsell, cross-sell), contraction (downgrades), and churn. Formula: (starting MRR + expansion - contraction - churn) / starting MRR x 100. Above 100% means the existing book grows even without new customers - the gold standard. Best-in-class SaaS runs 120-130% NRR. NRR is arguably the single most important metric for recurring-revenue businesses because it captures retention and expansion together.
In your business
- →Track NRR monthly or quarterly - it's the headline health metric for recurring revenue
- →NRR above 100% means you grow without net new customers - the holy grail
- →Decompose NRR into expansion, contraction, churn - they have different fixes