GRR reflects your ability to retain customers. GRR calculates total revenue (excluding expansion) minus revenue churn (contract expirations, cancelations, or downgrades). The difference between NRR and GRR is that GRR doesn’t account for expansion revenue.
GRR also tends to decline as companies grow. Over time, your customer base becomes more diverse and has more opportunities to churn.
Example:
- Your business enters January with an MRR of $27,000.
- Your business exits January with $5,000 in revenue churn due to contract expirations.
- Your GRR for January is 81% ($22,000 ÷ $27,000).