Gross Revenue Retention (GRR)
The percentage of recurring revenue retained from an existing customer cohort excluding expansion — a pure measure of how much of your base you are losing.
What Is Gross Revenue Retention (GRR)?
Gross Revenue Retention measures the MRR/ARR retained from a cohort excluding expansion. It includes churn and downgrades but never exceeds 100%. GRR answers the question: "How much of our base is actually staying and paying at least what they started with?" Healthy SaaS GRR is 85%+; best-in-class enterprise SaaS is 95%+.
Also Known As
- Finance teams: gross dollar retention (GDR)
- Investor view: base retention rate
- CS teams: retained revenue percentage
- Board reports: GRR, downside retention
How It Works
Starting MRR from Jan 2025 cohort: $100K. Twelve months later: $18K churned, $4K contraction, any expansion ignored. GRR = ($100K - $18K - $4K) / $100K = 78%. This tells you that even before expansion, you're losing 22% of the base per year. If NRR is 110% but GRR is 78%, expansion is papering over a serious leak — a fragile structure that could collapse if expansion slows.
Best Practices
- Do track GRR alongside NRR. The gap between them shows how dependent your growth is on expansion vs stability.
- Do segment GRR by plan and segment. Enterprise GRR should be 90%+; SMB 75%+ is often acceptable.
- Do exit-interview customers who caused contraction churn. They're still customers, so you can actually learn from them.
- Don't hide weak GRR behind a strong NRR headline. Investors will dig and find it.
- Don't treat GRR and churn as the same. GRR is dollars; churn is often logos.
Common Mistakes
- Confusing GRR with customer retention rate. GRR is revenue-weighted; customer retention is logo-weighted.
- Including new logos acquired in the period. GRR is a same-cohort metric — new logos don't count.
Industry Context
Enterprise SaaS: GRR of 90-95% is healthy. Mid-market: 85-90%. SMB: 75-85%. Consumer subscription: often 50-70% annually. B2B services: usually tracked as renewal rate, conceptually similar. Ecommerce doesn't use GRR.
The Behavioral Science Connection
GRR measures resistance to alternative seeking — how many customers don't actively evaluate replacing you. High GRR correlates with workflow embedding and social proof inside the organization (once two departments use the tool, one defecting is unusual).
Key Takeaway
NRR gets the investor headlines; GRR tells you whether your house has termites. Report both, and be suspicious of any company that shows strong NRR without also showing strong GRR.