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.

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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.

KPI Example

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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