Metric Definition Checker

Two companies can both report "NRR" and mean different things. Paste how your team calculates a metric, and the checker compares it with the definitions used on this site, flags common mistakes, and links to the method.

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Educational output based on your inputs; not professional or fundraising advice.

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Example: a CAC built from ad spend

A definition we checked with the tool on 2026-09-29 (same result on three runs):

CAC = our Google and Meta ad spend for the month ÷ all new paying customers we signed that month.

There is a second problem the checks don't cover: the denominator. Ad CAC divides ad spend by the new customers who came from ads, not by every new customer, and Overall CAC divides all sales and marketing spend, including sales salaries, by all new customers. Mixing the two makes paid acquisition look cheaper than it is.

How it works

Each metric has a short list of checks, written from our guides and definition rules. An automated model (TypeSafe AI) reads your text and answers each check as a yes-or-no question. When it can't tell, the result says so instead of guessing. It does not calculate anything or rewrite your definition, and it can misread unusual wording, so treat the result as a prompt to review, not a verdict.

Some items are notes rather than issues. For example, measuring money lost instead of customers lost is a valid choice for "customer churn"; the checker only suggests labeling it clearly. See the Terms of Use and Disclaimer.

What the checker looks for

MRR

  • One-time and setup fees. MRR counts only recurring charges. Leave setup, onboarding and other one-time fees out.
  • Non-recurring services. One-off services are not recurring revenue. Only services billed on a repeating plan belong in MRR.
  • Annual plans spread across months. Convert each plan to a monthly amount: divide an annual subscription by 12 instead of counting it all in the month it is billed.

ARR

  • One-time revenue. ARR counts only recurring revenue. Leave setup fees, services projects and one-off purchases out.
  • One year of each contract. ARR counts one year of recurring value. The full multi-year amount is total contract value (TCV), a separate figure.
  • Signed contracts only. Keep unsigned deals, pipeline and expected renewals out of ARR. Report forecasts as a separate, labeled series.

Customer churn

  • Starting customers only in the denominator. Divide by customers at the start of the period. Customers acquired during the period are not part of the base that can churn.
  • Returning customers reported separately. Report reactivated customers separately instead of netting them against churn. 100 at the start, 5 cancel and 2 return is 5% churn, not 3%.
  • Period stated. State the period. Monthly and annual churn rates are not directly comparable.
  • Counts accounts or money. This measures revenue lost from churned customers (often called revenue churn). Label it clearly when comparing with others. (note, not an error)

NRR

  • Existing customers only. NRR follows customers you had at the start of the period. Leave out revenue from new customers.
  • Period stated. State the period. Monthly NRR is valid, but it is not comparable with annual NRR.
  • Reactivations excluded. Reactivated customers were not in the starting cohort. Report their revenue as reactivation MRR, outside NRR.
  • Only recurring expansion. Only recurring expansion counts, such as a monthly support plan. One-time services and fees stay out.

GRR

  • Expansion left out. GRR leaves expansion out. Adding upgrades turns it into NRR.
  • Capped at 100%. GRR cannot exceed 100%. A higher result means expansion entered the calculation.
  • Reactivations excluded. Keep reactivated customers outside GRR; they were not in the starting cohort.

LTV

  • Churn above zero. With zero churn the formula gives an infinite lifetime. A short period without cancellations does not prove customers stay forever.
  • Matching periods. Use revenue and churn for the same period, such as monthly ARPA with monthly churn.

CAC

  • Sales salaries included. Overall CAC includes sales salaries. Founder salary is optional, but say so if you include it.
  • Ad CAC labeled as Ad CAC. Using only ad spend gives Ad CAC. Label it Ad CAC, or add all sales and marketing spend for Overall CAC.
  • Reactivations not counted as new. Reactivated customers were acquired before. Counting them as new makes CAC look cheaper than it is.

CAC payback

  • Gross margin applied. Divide CAC by monthly gross profit per customer (ARPA × gross margin), not by revenue alone.