Net Revenue Retention (NRR)
Also known as: Net Dollar Retention, NDR
The percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn. NRR above 100% means the customer base is growing without new logos.
Formula
(Starting ARR + Expansion - Contraction - Churn) / Starting ARR × 100 Who Is This Metric For?
Report monthly to leadership as the definitive measure of CS’s impact on revenue growth.
Board-level metric showing whether the installed base is growing or shrinking without new logos.
Track by team and segment to identify which CSMs and accounts are driving net growth.
Priority by Stage
Focus on GRR first. You need to stop the bleeding before optimizing for growth. NRR is noise when your churn fundamentals aren't solid.
Start tracking NRR alongside GRR. Use it to build the case for CS as a revenue function, but don't optimize for it yet.
NRR should be a primary CS metric. Your expansion motions and risk management should directly influence this number.
NRR is a board-level metric. Focus on predictive modeling and cohort-level NRR analysis to drive strategic decisions.
Benchmarks
| Segment | Good | Great | World Class |
|---|---|---|---|
| SMB | 100-105% | 105-110% | 110%+ |
| Mid-Market | 105-110% | 110-120% | 120%+ |
| Enterprise | 110-115% | 115-130% | 130%+ |
Common Mistakes
- Tracking NRR before you have reliable GRR — you can't grow what you can't retain
- Blending all segments into one NRR number — segment-level NRR reveals where the real problems and opportunities are
- Confusing NRR with logo retention — you can have great NRR with terrible logo churn if a few large accounts expand