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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.

Updated 2026-01-28

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Revenue Retention Curve Calculator
Example: $100k MRR, 2% expansion, 0.5% contraction, 1.5% churn, 24 months

Why retention curves matter

NRR and GRR are often reported as a snapshot, but the compounding effect over 12-24 months is what drives growth quality. A retention curve makes that compounding visible and helps you see which lever matters: expansion vs churn/contraction.

GRR vs NRR (quick recap)

  • GRR excludes expansion; it answers how leaky the bucket is after churn and downgrades.
  • NRR includes expansion; it can exceed 100% when upgrades outweigh churn/contraction.
  • Both can be true: strong NRR can hide weak GRR (expansion masking churn).

Modeling approach (simple monthly compounding)

  • Start with cohort MRR.
  • Apply churn and contraction to get GRR.
  • Apply expansion (and contraction/churn) to get NRR.
  • Compound monthly to see 12-24 month outcomes.

Common mistakes

  • Using blended averages across segments (plan/channel) and hiding weak cohorts.
  • Mixing time units (annual NRR used as monthly rates).
  • Confusing logo churn with revenue churn (different denominators).

FAQ

What's a good GRR-
It depends on segment and stage, but GRR is a 'leakiness' metric: higher is better. Track GRR over time and by segment; improvement is often driven by product quality and customer success.
Can I forecast growth using NRR alone-
NRR is only the existing base. Overall growth also depends on new customer MRR. Use an MRR forecast model that combines new MRR with retention and expansion.

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NRR vs GRR: differences, formulas, and how to use both
NRR includes expansion; GRR excludes it. Learn when each metric matters, how to compute both from the same cohort, and how to interpret the gap.
MRR forecasting: a simple bridge model (new, expansion, churn)
A practical way to forecast MRR using a monthly bridge: starting MRR + new MRR + expansion - contraction - churn.
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