What is Gross Revenue Retention (GRR)? Formula + Examples
Table of Contents
Gross revenue retention is the percentage of the recurring revenue remaining after accounting for churn and downgrades (but excluding expansion or upsells).
It’s a core SaaS performance metric that is used for measuring retention performance.
Here’re some accepted benchmarks across SaaS and subscription-based industry:
- SMB SaaS: 80% – 90%
- Mid-market: 85% – 95%
- Enterprise: 90% – 95%+
The higher customer lifetime value and product complexity, the higher the GRR tends to be.
In this guide, we’ll break down exactly what GRR is, how to calculate it, what a good GRR looks like, and how it differs from similar metrics like Net Revenue Retention (NRR) and Gross Dollar Retention (GDR).
Let’s dive in.
Quick Recap
- Gross Revenue Retention is the percentage of the recurring revenue remaining after accounting for churn and downgrades (but excluding expansion or upsells)
- It’s a core SaaS KPI metric that is used for measuring retention performance.
- A GRR of 95% is good. Higher is excellent. Anything lower than 80% is a red flag.
- A GRR of 100% means no revenue loss. Yet, GRR is always ≤ 100%. Because it does not count expansion revenue like upsells, add-ons, upgrades.
What is Gross Revenue Retention?
GRR tells the percentage of the recurring revenue remaining after accounting for churn and downgrades (but excluding expansion or upsells).
It’s a core SaaS KPI metric that is used for measuring retention performance. It reflects a clean view of retention by filtering out any extra money customers might spend.
How to Calculate It?
Here’s the formula:
Gros Revenue Retention = (Starting MRR – Churned MRR – Downgraded MRR) ÷ Starting MRR
Where each term means:
- Starting MRR (aka RR₀): Monthly Recurring Revenue from existing customers at the beginning of the period.
- Churned MRR: Revenue lost when customers fully cancel their subscriptions.
- Downgraded MRR: Revenue lost when customers reduce their subscription value (e.g., move to a cheaper plan).
Gross Revenue Retention Example
Let’s say your SaaS company starts the quarter with $100,000 in MRR from existing customers.
Over the quarter:
- You lose $10,000 due to cancellations.
- You lose another $5,000 from downgrades.
- You gain $15,000 from upsells (but we ignore this for GRR).
Apply the formula:
GRR = ($50,000 - $3,000 - $2,000) ÷ $50,000
GRR = $45,000 ÷ $50,000 = 0.9 → 90%
So, your gross revenue retention is 90%, meaning you retained 90% of your starting revenue from existing customers, excluding upsells.
What’s Difference Between Gross Revenue Retention (GRR) vs. Net Revenue Retention (NRR)
Net revenue retention (NRR) includes everything in GDR plus expansion revenue. It reflects how much revenue your existing customers generate after accounting for churn, downgrades, and upgrades. NRR can exceed 100%, which is a strong signal of product-market fit and growth efficiency.
While Net Revenue Retention includes both customer losses and gains, gross revenue retention isolates just the losses, giving you a clearer picture of customer satisfaction and product stickiness.
Remember, Net Revenue Retention (NRR) can stay high even when you’re losing customers—if your upsell game is strong. But GRR cuts that noise and gives you the unboosted view of how well your product retains revenue.
Further Reading
Why Gross Revenue Retention Matters?
Gross revenue retention is a vital health check for any recurring revenue business.
By tracking GRR, you get:
- A clearer picture of customer satisfaction.
- Early warning signs of churn or downgrades.
- A metric you can improve with better onboarding, support, and product value.
Further Reading
What is a Good Gross Revenue Retention?
A good gross revenue retention rate typically falls between 80% to 95%. The closer to 100%, the better.
Here’re some accepted benchmarks across SaaS and subscription-based industry:
- SMB SaaS: 80% – 90%
- Mid-market: 85% – 95%
- Enterprise: 90% – 95%+
The higher customer lifetime value and product complexity, the higher the GRR tends to be. That’s why GRR in the above group is typically lower in SMBs and higher in enterprise.
Yet, knowing that GRR is always ≤ 100%. Because it does not count expansion revenue like upsells, add-ons, upgrades. To go over 100%, you'd have to gain more than you had — but GRR purposely ignores gains.
In short, gross revenue attention is a key metric for SaaS and subscription-based businesses to assess product value. It’s the foundation of recurring revenue. If your GRR is weak, growth won’t be sustainable—no matter how fast you upsell.
Further Reading
Gross Revenue Retention FAQs
How do you calculate gross revenue retention?
To calculate Gross Revenue Retention (GRR), you take: GRR = (Starting MRR – Churned MRR – Downgraded MRR) ÷ Starting MRR
What is the difference between GRR and MRR?
GRR measures how much revenue you retain from existing customers over a set period, excluding any new sales or upgrades. MRR, or Monthly Recurring Revenue, represents your total recurring revenue in a given month—including new customers, upgrades, and churn.
What is the difference between GRR and NRR?
GRR looks at how much recurring revenue you keep from your existing customers without counting upgrades or expansions. NRR (Net Revenue Retention) includes those upgrades and expansions.
What is the difference between gross and net revenue retention?
Gross Revenue Retention only accounts for revenue lost due to customer churn or downgrades—it tells you how well you're holding on to what you already had. Net Revenue Retention goes a step further and includes any added revenue from upselling and cross-selling, giving a more complete view of your customer revenue performance.
What does GRR stand for?
GRR stands for Gross Revenue Retention. It’s a key metric used by SaaS and subscription-based businesses to track how much recurring revenue is retained from existing customers over a certain period, excluding upsells or expansions.
What is a good GRR rate?
A good GRR rate typically falls between 85% to 95%. The closer to 100%, the better—it means you're keeping most of your revenue base. Anything below 80% may suggest high churn or significant downgrades and should be investigated.
Why is GRR so important?
GRR is important because it gives you a clear picture of how well you retain existing customers without relying on growth from upgrades or new sales. A strong GRR signals revenue stability, customer satisfaction, and long-term business health.
Which is better, NRR or GRR?
It depends on what you're measuring. GRR is better for understanding retention risks and baseline revenue health, while NRR is better for tracking overall growth from existing customers. Most businesses track both to get the full picture.
Leah Tran is a Content Specialist at TrueProfit, where she crafts SEO-driven and data-backed content to help eCommerce merchants understand their true profitability. With a strong background in content writing, research, and editorial content, she focuses on making complex financial and business concepts clear, engaging, and actionable for Shopify merchants.
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