NRR Playbook
Improve net revenue retention by focusing on expansion, contraction control, and churn reduction.
Quick checklist
- Separate new revenue from existing customer revenue.
- Measure expansion, contraction, and churn monthly.
- Track NRR by cohort or segment.
- Set an NRR target per product line.
- Align success plans with expansion levers.
Step-by-step
- Input starting MRR from existing customers only.
- Add expansion, contraction, and churned MRR.
- Review NRR and net revenue change.
- Segment by plan or customer size to find weak cohorts.
- Map expansion playbooks to teams and timelines.
Expansion levers
- Seat growth or usage growth
- Tier upgrades or packaging unlocks
- Add-ons tied to new workflows
- Annual prepay upgrades
Contraction and churn risks
- Feature gaps vs competitors
- Pricing too high for low-usage customers
- Poor onboarding or low activation
- Misaligned value metric
Common mistakes
- Including new customer MRR in NRR.
- Mixing bookings or billings with MRR.
- Using annual churn in a monthly model.
- Ignoring contraction trends until churn spikes.
