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The formula written out term by term, with the three performance bands. The right first read if you have been nodding along in NRR conversations without being sure of the calculation.
Net revenue retention (NRR): What is NRR and why does it matter for SaaS businesses?
From Stripe 9 min read
- NRR = (beginning recurring revenue minus churn minus downgrades plus upgrades) divided by beginning recurring revenue, times 100.
- Reading the number: above 100 percent is healthy, 80 to 100 percent needs work, under 80 percent is weak.
- Acquiring a customer costs 5 to 25 times more than keeping one, and a 5 percent retention gain lifts profit 25 to 95 percent.