What is Gross Revenue Retention (GRR)?
Gross revenue retention measures the percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue. It isolates your churn and contraction problem.
GRR tells you how much revenue you'd have if you never upsold or cross-sold a single customer. It strips out the good news (expansion) and shows you the raw retention picture. A GRR of 90% means you're losing 10% of revenue annually to churn and downgrades before expansion offsets it.
GRR Formula
GRR = (Starting ARR - Contraction - Churn) / Starting ARR x 100. GRR can never exceed 100% because it excludes expansion. For example: $10M starting ARR, $300K in downgrades, $700K in churn. GRR = ($10M - $300K - $700K) / $10M = 90%. That 90% is before your expansion team works its magic.
GRR vs NRR
NRR includes expansion revenue, so it can exceed 100%. GRR strips it out and maxes at 100%. Think of GRR as your floor (how much you keep no matter what) and NRR as your ceiling (how much you keep plus grow). A company with 85% GRR and 120% NRR has a churn problem masked by strong expansion. That's fragile, because expansion can slow while churn compounds. CROs and boards watch both metrics for this reason.
GRR Benchmarks by Segment
Best-in-class enterprise SaaS companies target 95%+ GRR. Mid-market typically lands at 90-95%. SMB-focused products see 80-90% GRR due to higher natural churn in smaller businesses. If your GRR drops below 85%, your customer success team has a structural problem, and no amount of new logo acquisition will outpace the leak. CROs with full revenue ownership should treat GRR below 90% as a five-alarm fire.
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