The percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue — measures pure customer retention before upselling.
Deeper Explanation
Gross retention answers: "Of the revenue we had from existing customers last year, what percentage do we still have this year — before any expansion?" A gross retention of 90% means 10% of prior-year customer revenue was lost to churn. Best-in-class enterprise software businesses achieve gross retention above 90%; consumer subscription businesses typically see 80–85%. Gross retention and net revenue retention (which includes expansion) together reveal the full picture of customer health: high gross retention with low NRR means customers are staying but not growing; low gross retention with high NRR means churn is being masked by expansion from the remaining customers.
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