GRR and NRR are often confused, but they answer different questions. Understanding both helps you diagnose whether a retention problem is a churn problem, an expansion problem, or both.
The formulas
GRR = (Starting MRR − Contraction − Churn) ÷ Starting MRR × 100 NRR = (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR × 100
The only difference: NRR includes expansion MRR. GRR never exceeds 100%.
What each metric tells you
GRR is a pure retention metric. It measures your ability to keep existing revenue without any upselling. A company with 95% GRR retains 95 cents of every dollar from existing customers before any expansion.
NRR includes expansion, so it can exceed 100%. A company with 95% GRR and 25% expansion contribution has NRR = 120%. The expansion is offsetting churn and then some.
When each matters in practice
- Investor due diligence: NRR is the headline metric. Investors want to see the combined retention + expansion effect.
- CS team effectiveness: GRR is more actionable. Your CS team controls churn directly but only partially controls expansion.
- Product-market fit signal: GRR below 85% in SMB or 90% in enterprise is a red flag that requires product or positioning work before scaling GTM.
Use the NRR Calculator to see both metrics side-by-side for your own MRR data.