Formula
GRR = Σ min(customer’s MRR today, their MRR 12 months ago)
÷ Σ their MRR 12 months agoWorked example
Illustrative figures. Customer A’s growth counts for NRR but is capped for GRR.
| Customer | 12 months ago | Today | Counted for GRR |
|---|---|---|---|
| Customer A | 40,000 | 46,000 | 40,000 |
| Customer B | 30,000 | 25,000 | 25,000 |
| Customer C | 20,000 | – | – |
| Customer D | 10,000 | 10,000 | 10,000 |
| Total | 100,000 | 81,000 | 75,000 |
GRR = 75,000 ÷ 100,000 = 75.0%
NRR = 81,000 ÷ 100,000 = 81.0%
Why cap each customer
Expansion from one customer should not offset losses from another. Capping each customer at their starting MRR means GRR changes only through contraction and churn.
What GRR tells you
GRR is the floor of your retention. If expansion stopped, NRR would fall towards GRR. The gap between the two shows how much of your retention depends on upsell.
How Revnewed calculates it
GRR uses the same customer set and rates as NRR: customers with MRR twelve months ago, both periods at today’s rates, each customer capped at their MRR then.
Common mistakes
- Netting expansion against churn
- That is NRR. GRR ignores expansion entirely.
- Capping the total instead of each customer
- A cap on the portfolio lets one customer’s growth cover another’s loss.
- Different customer sets for NRR and GRR
- Both should start from the same customers, at the same rates, on the same date.