Net Revenue Retention: The Clearest Signal of Real Growth (and How to Calculate It)

Kremena Toshev, Principal at SNÖ Ventures, invests in early-stage tech companies and works closely with some of the Nordics’ most exceptional founders.

Before joining SNÖ, she started her career at the biotech startup Water Lens in Houston, TX, and later built and led Cutting Edge, Norway’s largest science and tech festival—growing it from 300 to over 1,500 attendees from across 15+ countries in just two years.

Kremena brings a mix of operational, commercial, and investment experience, and she’s deeply committed to helping the Nordic startup ecosystem grow.

When asked what she believes every startup CEO should stay close to, her answer came quickly: Net Revenue Retention.

Read on to learn how to get it right?

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Research from Harvard Business Review shows that improving customer retention by just 5% can increase profitability by anywhere from 25% to 95% (!). At the same time, acquiring a new customer can cost 5-25x more than retaining an existing one.

That’s why Net Revenue Retention (NRR) has become such a central metric. Unlike churn, which only shows what’s lost, NRR gives a more complete view of how your existing customer base is evolving—looking at how your current customers increase or decrease their spending. In other words, it tells you if the customers who already trust you are still finding value—and ideally, growing with you.

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How to calculate NRR?

Start with the MRR from your existing customers. Add what you gained from expansions and upsells. Subtract what you lost from downgrades and churn. Divide by your starting MRR and multiply by 100.

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What’s a “Good” NRR?

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• >120% = Exceptional retention and growth (typical for top-quartile enterprise SaaS)
  
  
• 100–120% = Strong retention and growth
  
  
• 80–100% = Needs work (might need to improve upsells or reduce churn)
  
  
• <80% = Troubling (poor retention and a need for a better retention strategy)
  
  

Note: what’s “good” also depends on your stage and customer type. SMB-focused SaaS often sees lower NRR than enterprise, simply because expansion is harder.

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And what of GRR vs NRR? 

TL;DR: GRR tells you how sticky your customers are. NRR tells you how valuable they’re becoming. 

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Or in other words: 

GRR (Gross Revenue Retention) excludes upsells—it’s purely about retention without expansion.

NRR includes expansions—so it shows how much your customer base is actually growing.