What is the difference between gross retention and net retention, and which one should I watch?
Gross retention counts only what you lost: churn and downgrades, capped at 100 percent. Net retention adds expansion on top, so it can go above 100. Watch both, and watch gross first if you are early. A great NRR can sit on top of a bad gross number when a handful of accounts are expanding fast enough to paper over everyone else leaving, and that is a business with a hole in it that will show up two years later. The plain reading: gross tells you whether the product holds, net tells you whether it grows.
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5 resources, 1 India-specific, 5 link-checked.
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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.
Kellogg's argument that churn has too many definitions to be trustworthy, and that private companies should measure NDR the way public ones do. The slides are the reference deck for this debate.
Concrete splits (70/30 or 80/20 base to variable) and the key design warning: pay on gross retention as well as NRR, or CSMs will chase expansion while the base leaks.
The good, better, best NRR bands (100, 110, 120 plus) that boards actually benchmark against, sitting alongside the efficiency metrics they get judged with.
It separates gross retention from net retention by showing which customer success actions move each one, so the two numbers stop blurring together. From an India based SaaS podcast, so the framing suits smaller teams.
