# Revenue Retention

Revenue retention, also known as Net Revenue Retention (NRR), is a sales metric that calculates the recurring revenue generated from existing customers over a fixed period.

Revenue retention provides sales teams with better insight than other metrics because it is influenced by changes in revenue that come from activities like upselling and [customer churn](/content/customer-churn/index.html). It’s also a key metric for helping you understand whether your product or service engages and meets the needs of customers over time.

You can calculate revenue retention by using the following formula:

_**Revenue Retention = (Starting [MRR](/content/monthly-recurring-revenue/index.html) – Downgrade MRR – Churn MRR + Upgrade MRR) / Base MRR x 100.**_

NRR shouldn’t be confused with Gross Revenue Retention (GRR) which is calculated by taking the total revenue generated at the end of a set period and dividing it by the revenue from the same customers at the start of the same period.

[Source: ChurnZero](https://www.gainsight.com/blog/the-right-financial-metric-for-customer-success-gross-retention-or-net-retention/)

## How to Measure Revenue Retention:

SaaS / Software Key Performance Indicators (KPIs) - Gross Revenue Retention - YouTube

Tap to unmute

[SaaS / Software Key Performance Indicators (KPIs) - Gross Revenue Retention](https://www.youtube.com/watch?v=PECItdQbU7I) [ContentByEd](https://www.youtube.com/channel/UCLDLmgdnc7UL6Uj7oXaf2XA)

ContentByEd525 subscribers

## FAQs

**What is revenue retention?**  
Revenue retention measures the ability of a company to maintain or increase its revenue from existing customers by preventing churn, upselling or cross-selling additional products or services, or through customer loyalty.

**How is revenue retention calculated?**  
Revenue retention is calculated using the following formula: Retention = (Starting MRR – Downgrade MRR – Churn MRR + Upgrade MRR) / Base MRR x 100.

**Does revenue retention include new customers?**  
Revenue retention is calculated using the revenue generated by your existing customers during a specified period. It excludes revenue from any new customers acquired in the same period.