How to Calculate Net Revenue Retention

Net revenue retention (NRR) explains how monthly recurring revenue (MRR) changes over your customer's lifetime. NRR > 100% means that over time the customer is going to pay you more than when they initially signed up. And < 100% means they will be paying you less.

For example, if your NRR is 120% and you stopped investing any dollars in acquiring new logos but focused on expanding your current customers, your business would still grow by 20% every year. It also indicates that your product works well, as customers wouldn’t continue expanding their usage of the product if your product was no good.

This guide shows you how to calculate NRR from a set of customer billing data. Ready? Let's get started!

Steps to Get Started

Download the example workbook to follow along:

1. Gather the Data

Getting this data is a blog post in itself. So, for now, I've attached a sample dataset.

2. Crunch the Numbers

We will calculate it on a monthly basis.

3. Enrich the Data

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How to Calculate Net Revenue Retention

Steps to Get Started

1. Gather the Data

2. Crunch the Numbers

3. Enrich the Data

Assessing Business Performance

FAQs

The Bottom Line