Gross Revenue Retention (GRR)
What Is Gross Revenue Retention?
Gross Revenue Retention (GRR) measures the percentage of recurring revenue retained from your existing customer base over a given period—without counting any expansion, upsell, or cross-sell revenue.
It reflects your ability to maintain your current revenue footprint despite customer churn or contraction.
Formula: Gross Revenue Retention (%) = [(Starting MRR – Contraction – Churn) / Starting MRR] × 100
- Starting MRR = Monthly Recurring Revenue from existing customers at the beginning of the period
- Contraction = Revenue lost due to downgrades
- Churn = Revenue lost from canceled accounts
GRR can never exceed 100%. It’s a conservative, yet powerful, indicator of customer success performance.
Why Gross Revenue Retention Matters in SaaS CX
GRR gives you a clear, unpadded view of whether your product is holding value over time. Here’s why it’s essential:
Baseline for Revenue Quality: GRR isolates retention without the noise of expansion, offering an unvarnished view of customer satisfaction and product-market fit.
Churn and Downgrade Visibility: By excluding growth, GRR highlights whether CX and support teams are effectively preventing account loss and contraction.
Forecasting Confidence: High GRR means revenue is more predictable—even before accounting for sales-driven expansion.
Signals Product Stickiness: GRR reveals whether your customers stay because your product is essential—not just because your team sold them more.
How to Measure Gross Revenue Retention
Gross Revenue Retention (GRR) measures how much recurring revenue you retain from your existing customer base, excluding any upsells or expansions. It’s a core SaaS health metric that focuses purely on churn and contraction.
Step-by-Step
- Start with Beginning MRR or ARR Use revenue from existing customers at the beginning of the period (exclude new customer revenue).
- Subtract Churn and Contraction Remove lost revenue from cancellations, downgrades, or seat reductions.
- Apply the Formula
Formula:
GRR (%) = [(Starting MRR – Contraction – Churn) ÷ Starting MRR] × 100
Example:
If you started with $100,000 MRR, lost $5,000 to churn and $3,000 to downgrades:
GRR = [($100,000 – $5,000 – $3,000) ÷ $100,000] × 100 = 92%
Tips for Accurate GRR Tracking
- Use cohort-based tracking to isolate existing customer revenue
- Exclude all expansion revenue, reactivations, or upsells
- Analyze monthly and quarterly trends to catch early signals of retention risk
Gross Revenue Retention is your unfiltered retention baseline. It strips away the upside of growth to reveal the core strength of your product and customer experience. For CX leaders, it’s one of the most telling indicators of whether your customers need your product—or are merely tolerating it.