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NRR vs GRR: what each one tells a customer success team

By Draft First, October 2026

Net revenue retention and gross revenue retention are the two numbers leadership asks CS about most. They sound similar but tell different stories, and reporting only one can hide real problems.

The formulas

GRR = (Starting ARR - churned ARR - downgrades) / Starting ARR
NRR = (Starting ARR - churned ARR - downgrades + expansion) / Starting ARR

GRR can never go above 100%. NRR can, because it adds expansion.

A worked example

Starting ARR: $5,000,000
Churned: $300,000 | Downgrades: $150,000 | Expansion: $700,000
GRR = (5,000,000 - 450,000) / 5,000,000 = 91%
NRR = (5,000,000 - 450,000 + 700,000) / 5,000,000 = 105%

Try your own numbers in the free NRR and GRR calculator.

What each one tells you

What's a good number?

Common rules of thumb for B2B software: GRR above 90% is solid, and NRR above 100% means your base grows without new customers. Benchmarks vary a lot by segment. Small-business products usually run lower than enterprise ones, so compare against your own trend first.

How CS moves each one

• GRR: catch risk early with a weekly churn risk review, fix onboarding so customers reach first value, and run real churn analysis.
• NRR: all of the above, plus spotting expansion in account plans and QBRs.

For the full set of numbers worth tracking, see customer success metrics and KPIs.

Questions

What is the difference between NRR and GRR?

GRR measures revenue kept after churn and downgrades. NRR also adds expansion, so it can exceed 100%.

What is a good GRR?

For B2B software, above 90% is commonly seen as solid, though it varies by segment.

Should CS teams report NRR or GRR?

Both. NRR alone can hide steady losses behind a few large expansions.