GRR Calculator

What is Gross Revenue Retention (GRR)?

Gross Revenue Retention (GRR) measures how well you retain revenue from existing customers, excluding any expansion revenue. Unlike Net Revenue Retention (NRR), GRR only considers downgrades and churn, making it a more conservative measure of customer retention.

Use this calculator to:

• Track your GRR and compare it against industry benchmarks for your company size
• See how your retention performance stacks up against similar companies
• Visualize the impact of churn and contraction on your revenue
• Project your future GRR based on current rates
• Understand areas for improvement in your retention strategy

GRR will always be less than or equal to 100% since it excludes expansion revenue.

GRR = (Starting MRR - Contraction - Churn) / Starting MRR × 100%

GRR can also be calculated as GRR = 100% - MRR contraction rate - MRR churn rate

For example:

• Starting MRR: $100,000
• Monthly Contraction Rate: 0.5% ($500)
• Monthly Churn Rate: 6% ($6,000)
• GRR = 100% - 0.5% - 6% = 93.5%

This means you retained 93.5% of your existing customer revenue, ignoring any expansions.

Understanding GRR Components

GRR is influenced by three main factors:

1. Starting MRR: Your baseline recurring revenue

   • Monthly recurring revenue at the start of the period
   • Example: $100,000 MRR from existing customers

2. Contraction Revenue: Reduced revenue from downgrades

   • Plan downgrades
   • Reduced seats/licenses
   • Example: Customer decreases from $1,500 to $1,000 MRR

3. Churn Revenue: Lost revenue from cancellations

   • Complete customer cancellations
   • Example: Customer cancels $1,000 MRR subscription

Note: GRR intentionally excludes expansion revenue to provide a more conservative view of retention.

How to use this calculator

The calculator will automatically:

• Calculate your monthly GRR rate based on contraction and churn
• Show GRR trends over time with a detailed chart
• Display MRR from existing customers separately
• Project future GRR based on current rates
• Visualize the impact of contraction and churn on your revenue

Note: For simplicity, this calculator assumes constant monthly rates and does not account for seasonal variations in contraction and churn. For more accurate forecasting, consider adjusting your rates periodically to reflect seasonal patterns.

To get started:

1. Enter your Starting MRR

   • This is your total Monthly Recurring Revenue
   • Example: $100,000 MRR

2. Set your Monthly Rates

   • Contraction Rate: Revenue lost from downgrades (e.g., 0.5%)
   • Churn Rate: Revenue lost from cancellations (e.g., 6%)
   • Expansion Rate: Revenue gained from existing customers (not used in GRR)

3. Adjust Additional Parameters

   • New MRR per Month: Expected new revenue from new customers
   • Forecast Months: How far into the future to project (1-60 months)

Industry Benchmarks

GRR benchmarks vary by company size:

• Small SaaS (ARR < $1M): Typical GRR 75-85%
• Mid-Market ($1M-$10M ARR): Typical GRR 80-90%
• Enterprise ($10M+ ARR): Typical GRR 85-95%

A higher GRR indicates stronger revenue stability and customer satisfaction. While top-performing companies may achieve GRR above 90%, any rate above 85% is generally considered healthy, depending on your company size and market segment.

Understanding the Chart

The interactive chart shows:

• GRR Line: Your Gross Revenue Retention rate over time
• MRR Line: Total Monthly Recurring Revenue
• Existing Customer MRR: Revenue from current customers only
• Contraction Bars: Revenue lost from downgrades
• Churn Bars: Revenue lost from cancellations

You can hover over data points to see exact values and use the fullscreen mode for detailed analysis.

Common GRR Calculation Mistakes to Avoid

1. Including Expansion Revenue

   • GRR specifically excludes expansions
   • Only consider downgrades and churn

2. Including New Customer Revenue

   • GRR only considers existing customers
   • New customer revenue should be excluded

3. Mixing Time Periods

   • Use consistent time periods (monthly or annual)
   • Convert annual rates to monthly if needed

4. Ignoring Seasonality

   • Consider seasonal patterns in contraction/churn
   • Use longer periods to smooth seasonality

Best Practices for Improving GRR

1. Reduce Churn

   • Strong onboarding process
   • Regular customer health checks
   • Proactive support
   • Clear product value demonstration

2. Minimize Downgrades

   • Right-size initial deals
   • Clear feature value proposition
   • Usage monitoring and alerts
   • Flexible pricing tiers

3. Contract Optimization

   • Annual vs monthly billing
   • Contract term alignment
   • Clear cancellation policies
   • Value-based pricing

Related Metrics

• Net Revenue Retention (NRR): Like GRR but includes expansions
• Monthly Recurring Revenue (MRR): Base metric for GRR calculation
• Revenue Churn Rate: Component of GRR calculation
• Logo Churn Rate: Customer cancellation rate
• Contraction Rate: Rate of revenue reduction from downgrades