Definition
Net retention is the same idea as NRR: revenue retained from a cohort including expansion and contraction.
Formula
Net retention = (starting revenue + expansion - contraction - churn) / starting revenue
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Net Retention" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Retention Curve Calculator) to sanity-check assumptions.
- Read the related guide (e.g., Retention curves: how to read them and why they matter) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Retention Curve Calculator: Model a simple cohort retention curve (logo retention) and translate it into expected revenue and gross profit over time.
- Revenue Retention Curve Calculator: Model GRR and NRR over time from monthly expansion, contraction, and churn assumptions (existing cohort only).
- Retention Targets Planner (NRR/GRR): Compute required expansion (for a target NRR) and allowable churn+contraction (for a target GRR) using monthly rates.
Guides
- Retention curves: how to read them and why they matter: A practical guide to retention curves: what they show, how to interpret churn vs retention, and how to connect retention to LTV and payback.
- Revenue retention curves: GRR vs NRR over time (how to model): A practical guide to revenue retention curves: how GRR and NRR compound, how to interpret expansion vs churn, and how to avoid common mistakes.
- NRR/GRR targets: how to translate targets into expansion and churn goals: A practical guide to retention targets: how NRR maps to required expansion and how GRR maps to maximum churn+contraction (with monthly vs annual units).