PricingNest

GRR vs NRR: What to Track

Learn when to use gross vs net revenue retention and how to interpret gaps between them.

Quick checklist

  • Use GRR to isolate churn and downgrades.
  • Use NRR to capture expansion impact.
  • Track both monthly for the same cohorts.
  • Break metrics by plan and segment.
  • Align definitions with finance reporting.

Step-by-step

  1. Calculate GRR by excluding expansion revenue.
  2. Calculate NRR by including expansion and contraction.
  3. Compare the gap to see how much expansion offsets churn.
  4. Segment by plan to find where retention is weakest.
  5. Set targets for both metrics, not just NRR.

How to interpret the gap

  • High NRR + low GRR: expansion hides churn risk.
  • High GRR + low NRR: strong retention, weak expansion.
  • Both low: product or pricing issues that need attention.

Common mistakes

  • Reporting NRR without GRR context.
  • Mixing new customer revenue into retention metrics.
  • Using annual churn with monthly retention math.
  • Changing definitions between teams.

Tools to use