GRR vs NRR

Published by 4NLab · Updated · Our methods

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

QuestionGRRNRR
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.

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