Gross retention vs. net retention

Discover how Gross Retention and Net Retention provide insights into customer retention and revenue growth. Learn how to track, analyze, and improve these metrics to drive sustainable business success.

KPI Details

Category

Marketing

Type

Lagging Indicators

Calculation

GRR = ((Customers at End of Period – New Customers Added) / Customers at Start of Period) × 100

NRR = ((Customers at End of Period + Expansion Revenue – Churned Customers – Contraction Revenue) / Customers at Start of Period) × 100

Measure

Gross Retention Rate (GRR) measures how well a company retains existing revenue without expansion.

Net Retention Rate (NRR) accounts for revenue growth from existing customers, showing true revenue retention.

Data Sources:

Salesforce, HubSpot, Chargebee, Stripe, Recurly, ProfitWell, Baremetrics.

Frequency

Tracked monthly or quarterly to assess customer retention trends and revenue stability.

Example target

Achieve 95% Gross Retention and 110% Net Retention in Q3 by improving customer experience and expanding upsell opportunities.

Example Reports Use Case

A Customer Success Manager monitors GRR and NRR to measure retention performance. If GRR drops, they may enhance customer support; if NRR declines, they may refine upsell strategies.

Best Practices for Gross Retention vs. Net Retention

  • Enhance Customer Support & Onboarding

    Improve user experience to reduce churn and increase long-term retention.

  • Develop Expansion Strategies

    Increase NRR by upselling premium features or cross-selling complementary products.

  • Track Customer Feedback & Pain Points

    Use surveys and analytics to identify at-risk customers and prevent churn.

  • Analyze Retention Trends Regularly

    Monitor both GRR and NRR over time to refine retention strategies.

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