GRR vs NRR
GRR and NRR begin with the same existing customer cohort. GRR shows what remains after cancellations and downgrades; NRR also includes expansion. Reading them together reveals whether expansion is covering losses and helps separate retention work from upsell performance.
Key differences
| Question | GRR | NRR |
|---|---|---|
| Does expansion count? | No. Upgrades cannot offset losses in this calculation. | Yes. Expansion can offset losses or take retention above 100%. |
| Do new customers count? | No. Keep the opening customer group fixed. | No. New business belongs in a company growth bridge. |
| What should you investigate? | Cancelled accounts, downgrades, and their underlying causes. | The net effect of expansion and losses within the opening cohort. |
One scenario, two measures
Hypothetical worked scenario
A fictional opening cohort contributes $100,000 MRR. During the quarter, cancellations remove $5,000 and downgrades remove $3,000. Upgrades add $15,000.
GRR = ($100,000 − $5,000 − $3,000) ÷ $100,000 = 92%. NRR = ($100,000 + $15,000 − $5,000 − $3,000) ÷ $100,000 = 107%.
Both results can be true at the same time. The cohort earns 7% more recurring revenue overall while losing 8% of its starting revenue to churn and contraction. Calling this simply “107% retention” hides the gross losses.
Which should you use?
- Start with GRR when investigating why recurring revenue disappears. Review cancellation and downgrade reasons for the opening accounts.
- Use NRR to understand how the installed customer base contributes to growth. Split expansion into seats, product purchases, usage, and price changes when those drivers matter.
- Put both rates on the same time window and customer scope. A yearly NRR and a monthly GRR do not form a useful paired comparison.
Where comparisons can mislead
- Currency changes, segment migrations, and reactivation policies can make vendor reports differ. Reconcile customer-level records first.
- A large upgrade in one account can mask broad small-account losses. Add customer counts and concentration to the discussion.
Explore the full guides: GRR and NRR.
Sources and methodology
The references below explain the underlying methods. Our worked scenarios use hypothetical figures; they are not company results or current market benchmarks.
- ChartMogul: Gross MRR Retention report
Retention excluding expansion and reactivation.
- ChartMogul: Net MRR Retention cohort
Following recurring revenue from the same customer cohort.
Found an error or a definition that differs from your reporting? Send a correction with the page URL and the method you use.