Net Revenue Retention (NRR)
Net Revenue Retention (NRR), also called net dollar retention, is the percentage of recurring revenue retained from existing customers over a period, including expansion and after subtracting downgrades and churn. Above 100% means your existing base grows on its own.
Net Revenue Retention answers a deceptively powerful question: if you acquired zero new customers, would your revenue still grow? It’s the metric that separates leaky subscription programs from compounding ones.
The NRR formula
NRR measures the recurring revenue you kept from a cohort of existing customers, including upsells and after losses, over a period:
- NRR = (starting MRR + expansion MRR − contraction MRR − churned MRR) ÷ starting MRR × 100
- Note that new-customer revenue is excluded — NRR only measures your existing base.
What does NRR above 100% mean?
An NRR over 100% means expansion from your existing customers more than offsets the revenue you lost to downgrades and churn — so your base grows even with no new acquisition. For example, an NRR of 110% means $100,000 of starting MRR becomes $110,000 from the same customers a year later. Below 100% means you’re leaking revenue and must acquire just to stay flat.
How to improve NRR on Shopify
NRR rises when expansion beats churn, so push both levers:
- Grow expansion: upsells, add-ons, bundles, and tiered subscriber discounts that increase order value.
- Cut churn: dunning to recover failed payments, plus flexible pause/skip/swap to avoid cancellations.
- Encourage upgrades from monthly to prepaid or higher-frequency plans.
Frequently asked questions
What is a good net revenue retention rate?
Anything above 100% is strong, because it means your existing customers generate more revenue over time than you lose to churn. Best-in-class subscription businesses often reach 110–120%+. Below 100% indicates net revenue leakage.
What is the difference between NRR and gross retention?
Gross revenue retention ignores expansion and is capped at 100% — it only measures revenue lost. Net revenue retention includes expansion (upsells/cross-sells), so it can exceed 100%.
Does NRR include new customers?
No. NRR measures only revenue from your existing customer base. New-customer revenue is excluded so the metric isolates how well you retain and grow the customers you already have.
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