GRR (Gross Revenue Retention)
Median GRR for B2B SaaS is 90%. Best-in-class: >95%. Enterprise segments achieve 92-97%, SMB typically 85-90%. GRR below 80% signals serious retention issues (ChartMogul 2024).
💡TL;DR
GRR = revenue kept from existing customers (no expansion). Formula: (Starting MRR - Churn - Contraction) / Starting MRR. Max = 100%. Benchmarks: >95% excellent, 90-95% good, <85% concerning. GRR shows your "floor"—the worst case without any expansion. If GRR is low but NRR is high, you're relying on expansion to mask a churn problem.
Definition
The percentage of recurring revenue retained from existing customers, excluding expansion revenue. GRR = (Starting MRR - Churned MRR - Contraction MRR) / Starting MRR. Unlike NRR, GRR cannot exceed 100% because it only measures retention, not growth.
🏢What This Means for SMB Teams
SMB SaaS typically has lower GRR (85-90%) due to higher churn rates. Focus on getting GRR above 85% before investing heavily in expansion plays. A leaky bucket can't be fixed by pouring in more water.
Track MRR, churn, CAC payback—AI acts when metrics slip.
Metrics that matter, actions that move them.
📋Practical Example
A 30-person project management SaaS had 115% NRR but discovered their GRR was only 78%. Investigation revealed: SMB customers churned at 25% annually, but enterprise expansion masked it. They launched an SMB retention initiative: better onboarding, proactive health checks, downgrade-before-cancel options. After 6 months, GRR improved to 88% while NRR held at 112%. The business became much more predictable.
🔧Implementation Steps
- 1
Calculate GRR monthly: (Starting MRR - Churned - Contraction) / Starting MRR.
- 2
Segment GRR by customer tier: Enterprise, Mid-Market, SMB.
- 3
Compare GRR to NRR: large gap indicates expansion-dependent growth.
- 4
Set GRR floor targets by segment (e.g., Enterprise >95%, SMB >85%).
- 5
Alert when GRR drops 3+ points in a quarter.
❓Frequently Asked Questions
What's the difference between GRR and NRR?
GRR excludes expansion revenue, showing pure retention (max 100%). NRR includes expansion, showing net growth from existing customers (can exceed 100%). GRR is your "floor," NRR is your "ceiling" with existing customers.
Which metric should I prioritize: GRR or NRR?
Both matter, but sequence matters. First, get GRR to a healthy level (>85-90%). Then, focus on NRR through expansion. High NRR with low GRR is a warning sign—you're running on a treadmill.
⚡How Optifai Uses This
Optifai calculates GRR and NRR automatically by segment, highlighting when GRR drops significantly below NRR. Churn risk signals help identify at-risk accounts before they impact GRR.
📚References
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Related Terms
NRR (Net Revenue Retention)
The percentage of recurring revenue retained from existing customers after accounting for expansion, contraction, and churn. NRR = (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100. NRR >100% means you grow even without new customers.
Logo Churn vs Revenue Churn
Two related but distinct churn metrics. Logo Churn (customer churn) measures the percentage of customers who cancel. Revenue Churn measures the percentage of revenue lost to cancellations and downgrades. They often differ significantly based on which customer segments churn.
Customer Retention
The ability of a company to keep its customers over time, measured as retention rate (percentage of customers who continue doing business over a period).
Expansion Revenue
Additional recurring revenue from existing customers through upsells (higher tier), cross-sells (additional products), or seat expansion. Expansion Revenue = Ending MRR from Existing Customers - Starting MRR from Same Customers (excluding churn).