The percentage of revenue retained from existing customers in the current period vs the prior period, including expansion revenue and net of churn.
Deeper Explanation
NRR above 100% means the business is growing from its existing customer base alone — even without adding a single new customer. This is the hallmark of a best-in-class subscription business. An NRR of 130% means existing customers are paying 30% more year-over-year through upsells, cross-sells, or seat expansion. NRR below 100% means the business must constantly acquire new customers just to stand still — a treadmill that eventually breaks at scale. For subscription businesses, NRR is more important than gross customer retention because it measures the economic value retained, not just the count.
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