NRR & GRR Cohort Calculator
What a cohort of customers is worth a year later — and five years later.
Replaces: Cohort analysis in paid subscription analytics tools
How to use it
Take one group of customers, measured from a fixed starting point, and record what happened to their revenue over the following period. The result is how much of that revenue you kept, and how much you grew it, without counting any new customers.
Where the number comes from
- Net revenue retention is (starting + expansion − contraction − churn) ÷ starting. It can exceed 100%.
- Gross revenue retention is (starting − contraction − churn) ÷ starting. Expansion is excluded, so it can never exceed 100%.
- The gap between the two is the amount being carried by upgrades rather than by keeping customers.
- The projection compounds each rate forward five years, holding it constant, to show what the same cohort would be worth on each measure.
- New customers are deliberately excluded throughout. Including them measures sales performance, not retention.
What goes wrong
The part most calculators leave out.
- Cohort selection is where these numbers get flattered. Measuring only customers above a revenue threshold, or excluding those who churned in the first ninety days, produces a far better figure than the whole book would.
- Holding the rate constant for five years is a modelling convenience. Expansion usually slows as accounts saturate — there are only so many seats to sell into one company.
- A high net figure with a weak gross figure is fragile. It depends on a few accounts continuing to grow, and those accounts are usually also your largest concentration risk.
- Annual measurement hides timing. A cohort that churns heavily in month two looks the same as one that churns in month eleven, but they are worth very different amounts.
- Revenue-based retention says nothing about customer counts. Losing many small customers while one large one expands can produce excellent numbers and a dying business.
Why 107% retention can still be a leak
A cohort worth 1,000,000 expands by 220,000, contracts by 60,000 and churns 90,000. Net retention is 107% — respectable, and the number that goes in the deck. Gross retention is 85%: fifteen percent of the revenue base walked out or shrank. The 22-point gap is being carried entirely by upgrades. Compounded over five years, the NRR path reaches about 1.4m while the GRR path falls to roughly 440,000. Both describe the same customers. The difference between them is a bet that the expanding accounts keep expanding.
Questions
- What is a good net revenue retention rate?
- For business software, 100% is the line where the existing base sustains itself, and figures above 110% are generally regarded as strong. For products sold to small businesses, where accounts have less room to expand, materially lower figures are normal.
- Why does gross retention matter if net is above 100%?
- Because gross retention is the floor you would fall to if expansion stopped. A business at 120% net and 80% gross is one bad quarter of upgrades away from shrinking, and it will not see it coming in the net figure.
- Should I measure retention by revenue or by customer count?
- Both, because they answer different questions. Revenue retention tells you about the money; logo retention tells you whether your product works for the median customer. A business with excellent revenue retention and poor logo retention is being propped up by a handful of accounts.
- Does anything I type get sent anywhere?
- No. The whole calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.
Last updated .
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