Net Revenue Retention (NRR)

Calculate the percentage of recurring revenue retained from customers using StackIt Calculator.

Net Revenue Retention (NRR)

Calculate the percentage of recurring revenue retained from customers using StackIt Calculator.

Net Revenue Retention (NRR)

Calculate the percentage of recurring revenue retained from customers using StackIt Calculator.

Formula

NRR = (Starting MRR + Expansion - Churn) / Starting MRR

Know your metric

Importance of

https://docs.google.com/spreadsheets/d/1qJDC1yrBOgR1H9-Ny8QTrA6ltEZ7N3NInm0Vj5onEbw/copy

Crucial for understanding customer health and long-term revenue sustainability.


  1. Financial Health Indicator

Directly reflects the company’s ability to retain and grow revenue from existing customers, indicating overall financial health.


2. Customer Loyalty Insight

Provides insights into customer loyalty and product/service satisfaction.

  1. Predictive of GrowthHigh

NRR rates are often predictive of sustainable long-term growth.

Drawbacks of

https://docs.google.com/spreadsheets/d/1qJDC1yrBOgR1H9-Ny8QTrA6ltEZ7N3NInm0Vj5onEbw/copy

Does not account for new sales, focusing only on existing customers.


  1. Ignores New Business

Doesn't reflect new customer acquisitions, which can also be crucial for growth.


2. Can Mask Issues

A high NRR might mask issues in other areas like new business development or product innovation.


3. Complexity in Calculation

Requires accurate tracking of upgrades, downgrades, and churn, which can be complex to manage.

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