How GRR is calculated

Gross Revenue Retention (GRR) measures the percentage of your starting recurring revenue that remains after you subtract revenue lost from existing customers. The key idea is that GRR is “gross”: it counts losses (churn and downgrades) but does not count gains from the same customers (upgrades, seat expansion, add-ons, price increases, etc.). That’s why people call GRR a leak-proofing metric — it answers: “If I froze new sales and expansion, how much of my base would I keep?”

• Starting Revenue = MRR/ARR at the beginning of the period (from existing customers).
• Churned Revenue = revenue lost because customers canceled (logo churn that removes revenue).
• Downgraded Revenue = revenue lost from customers who stayed but reduced plan/seats/usage.
• GRR % = (Starting − Churn − Downgrades) ÷ Starting × 100

In math form: GRR = (R₀ − C − D) / R₀, where R₀ is starting recurring revenue, C is churned revenue, and D is downgraded (contraction) revenue. GRR can never exceed 100% because you can’t “retain” more than you started with when expansions are excluded.

Many teams also track Net Revenue Retention (NRR) in the same dashboard. NRR includes expansion: NRR% = (Starting − Churn − Downgrades + Expansion) ÷ Starting × 100. NRR can exceed 100% if your upgrades and add-ons outpace churn and downgrades. That’s great — but it can also hide product issues. Showing GRR next to NRR gives a cleaner story: GRR tells you if the bucket leaks; NRR tells you if you can pour in more than you lose.

Suppose you start the month with $50,000 MRR. During the month, you lose $3,000 of MRR from churn and another $2,000 from downgrades. Your GRR is: (50,000 − 3,000 − 2,000) / 50,000 = 45,000 / 50,000 = 90%. That means you kept 90 cents of every starting dollar. If you also earned $4,000 in expansion, your NRR would be (50,000 − 3,000 − 2,000 + 4,000) / 50,000 = 49,000 / 50,000 = 98%. In this story, expansions nearly offset losses, but the base still leaks.

Start with $100,000. Churn is $8,000, downgrades are $7,000, expansions are $25,000. GRR = (100,000 − 8,000 − 7,000) / 100,000 = 85%. NRR = (100,000 − 8,000 − 7,000 + 25,000) / 100,000 = 110%. Your dashboard looks “amazing” if you only show NRR, but GRR reveals a real issue: customers are leaving or contracting at a meaningful rate. This often points to onboarding gaps, unclear value, poor product reliability, or pricing friction. Fixing leaks usually improves both retention and sales efficiency.

Imagine a company at $200,000 starting revenue with GRR at 88% (12% lost). That’s $24,000 of revenue lost in the period. If the team improves GRR to 90%, lost revenue becomes 10% or $20,000. That’s a $4,000 swing per period. Over 12 months, the “same” business could retain roughly $48,000 more revenue (ignoring compounding and growth). Small GRR changes can have outsized impact — especially at scale.

What a “good” GRR looks like

Benchmarks depend heavily on market (SMB vs enterprise), contract length, product category, and pricing model. Instead of chasing a universal number, use GRR as a directional operating metric: is it improving, and do you understand the “why” behind churn and downgrades?

• 95%+ GRR: elite retention (often enterprise or mission-critical tools).
• 85–94% GRR: healthy/solid for many subscription businesses.
• 75–84% GRR: noticeable leakage — prioritize retention projects.
• <75% GRR: urgent leaks; growth will feel “uphill” without fixes.

• Word-of-mouth: retained customers are the ones who recommend you.
• Reviews: fewer churned users = fewer negative “it didn’t work” stories.
• Marketing ROI: better retention makes every acquired customer worth more.
• Product-led growth: retention is the ultimate “activation proof.”

If you want one simple retention goal: pick the largest loss source (churn or downgrades) and aim to cut it by 10–20% in 60 days.

What the sliders actually do

This calculator treats churn, downgrades, and expansion as percentages of your starting revenue for the chosen period. That keeps the UI simple and lets you “feel” the sensitivity: a 1-point shift in churn% instantly shows the revenue impact. Under the hood:

• Churned Revenue = Starting Revenue × (Churn %)
• Downgraded Revenue = Starting Revenue × (Downgrade %)
• Expansion Revenue = Starting Revenue × (Expansion %)
• Revenue Kept = Starting − Churn − Downgrades
• GRR% = Revenue Kept ÷ Starting × 100
• NRR% = (Revenue Kept + Expansion) ÷ Starting × 100

The meter at the bottom uses your GRR% to fill a bar so you can quickly see whether your retention is “leaky” or “elite.” It’s not a judgment — it’s a visual reminder that retention is a system: onboarding → activation → habit → renewal → expansion.

Tip: If you measure retention quarterly or annually, switch the period dropdown. The calculator still uses the same percentage math, but the labels update so your team reads it correctly.

Frequently Asked Questions

• Is GRR the same as revenue churn?

  They’re related but not identical. Revenue churn usually refers to the percentage of revenue lost from churn (and sometimes contraction). GRR is the percentage you keep after subtracting churn and downgrades. In fact, Revenue Churn + GRR = 100% when you define revenue churn as (churn + downgrades) ÷ starting.

• Should I use logo churn or revenue churn for GRR?

  GRR is a revenue metric, so use revenue lost (MRR/ARR). Logo churn (customers lost) is useful too, but two customers can represent very different revenue amounts.

• Why does GRR ignore expansion?

  Because GRR’s job is to measure leakage. Expansion can hide problems: you might be upselling power users while new customers churn quickly. GRR forces you to face the “base experience.”

• Can GRR be over 100%?

  No. GRR tops out at 100% because it excludes expansion. If you see >100%, you’re looking at NRR.

• What time window should I use?

  Use the same time window your business reviews. Monthly for high-velocity SMB products, quarterly for mid-market, and annual for enterprise with long contracts. Consistency matters more than the “perfect” window.

• What are the most common causes of downgrades?

  Downgrades often happen from budget pressure, overbuying seats, unclear pricing tiers, feature gaps, or a mismatch between promised and realized value. Instrument the downgrade path: “why now?” and “what would have prevented it?”

• How do I improve GRR without discounts?

  Focus on time-to-value, onboarding success milestones, reliability, and habit formation. A simple playbook: (1) identify the first “aha moment,” (2) get users to it faster, (3) reinforce the habit with templates or reminders, (4) proactively support accounts with low usage before renewal.

Tools that pair well with retention

Retention improvements compound when you connect them to pricing, delivery, and operations.

Use this to raise GRR in the real world

If your GRR is lower than you want, don’t “boil the ocean.” Use a focused checklist that improves the customer journey:

• Activation: define the first success milestone and measure time-to-value.
• Usage: track weekly active usage (and identify accounts trending down).
• Outcomes: provide a monthly “value report” customers can share internally.
• Renewal: schedule renewal conversations early (especially for annual contracts).
• Downgrades: add a downgrade survey + “save offer” that fixes the main objection.

You don’t need perfect dashboards to improve retention. A simple “accounts at risk” list and a consistent playbook can move GRR quickly.