Net Revenue Retention represents how well you are retaining
your existing recurring revenue. NRR is most typically measured either annually or month-to-month, but you are always comparing a cohort (a group of customers acquired at the same time) to see how their subscription revenue fares over the given time period. Think about your Netflix subscription, when you first signed up, are you still subscribed? And are you paying the same about as before?
Quick and SaaSy Way To Calculate:
Go into your billing/subscription management system such as Stripe
. Go back twelve months and find all of the customers you acquired in that month, total their MRR and save their Subscription ID (Look for all subscriptions with a created date in that month). Then, go to the most recent full month of billing data and pull all of the invoices the match the Subscription ID for all the new customers 12 months ago (the subscription ID lives on the invoice object and you can join the data using these IDs to only get the invoices tied to those subscriptions). Once you have them all you can calculate the total MRR in the most recent month, then just divide that number by previous years MRR number and you have your annual net revenue retention. If you want to take this analysis to the next level shoot me an email
and we can discuss how to segment and find how Net Revenue Retention can differ throughout your customer base.
Related Blog Posts: Net Revenue Retention