Definition
GRR shows how well you hold on to the revenue you already have, without letting upsells mask losses. Buyers and lenders lean on it because expansion can be volatile and retention usually is not.
Formula
GRRGRR = (Starting MRR − Contraction − Churn) ÷ Starting MRR
Example
Using the same Demo Co group: (200.0 − 3.2 − 5.2) ÷ 200.0 = 95.8%. Before correcting payment-failure re-creations, the reported figure was 91.5%.
Benchmarks
For B2B SaaS, 90% or higher is healthy; best-in-class enterprise software runs 95%+. SMB-focused products often run lower.
Common mistakes
- Capping at 100% but forgetting to exclude expansion entirely.
- Treating plan downgrades as churn, or churn as contraction.
- Inflated churn from billing artifacts.
Examples use Demo Co, a fictional $3M ARR SaaS company, or a generic company where noted. Benchmarks are common reference points, not targets for every business.