Churn Rate vs Net Revenue Retention (NRR)
Churn rate and NRR both measure customer retention but from opposite angles. Churn focuses on what you lose; NRR accounts for expansion that can offset those losses. A business can have a 10% churn rate but a 105% NRR if expansion revenue is strong.
At a Glance
Churn Rate
Percentage of customers lost over a given time period
Net Revenue Retention (NRR)
Revenue retained plus expansion from existing customers
Key Differences
- Churn rate only measures losses; NRR also captures upsells and expansions.
- Churn can be measured by number of customers or by revenue (revenue churn); NRR is always revenue-based.
- NRR > 100% is possible even with some churn if expansion exceeds losses.
- Churn rate is more actionable for customer success teams; NRR is more useful for finance and investors.
When to Use Each
Use Churn Rate when…
Use churn rate to diagnose product-market fit and support quality. It is the clearest signal that customers are leaving.
Full Churn Rate guide →Use Net Revenue Retention (NRR) when…
Use NRR to assess overall revenue health from the existing base, combining retention and upsell into a single number.
Full Net Revenue Retention guide →Formulas
CHURN RATE
Churn Rate = (Customers Lost During Period / Customers at Start of Period) × 100
(MRR Lost to Cancellations / MRR at Start of Period) × 100NET REVENUE RETENTION (NRR)
NRR = (Beginning MRR - Churned MRR + Expansion MRR) / Beginning MRR × 100
Charts
Churn Rate
Net Revenue Retention (NRR)