GRR (Gross Revenue Retention)
GRR doesn't tell you how much you're growing. It tells you how well you defend what you've already built, net of any upsell that might be hiding the cracks.
“An excellent NDR can hide a mediocre GRR. Expansion never really fixes a retention problem, it only masks it in the short term.”
Otto GTM ObservatoryWhy it must always be read alongside NDR
GRR and NDR together tell the full story. An NDR of 112% with a GRR of 82% says the company is losing customers and revenue at a worrying rate, but masking it with aggressive upsell activity on whoever remains.
This combination is unstable long-term: eventually the customer base available for expansion thins out, and apparent growth collapses along with the weak GRR that was propping it up.
Anti-patterns
Common mistake: externally reporting only NDR, which is almost always a higher and more presentable number, without publishing the GRR that would reveal the real health of the customer base.
Second mistake: treating a 100% GRR as a permanent realistic target. A healthy GRR is high but not perfect: a baseline of physiological contraction and churn exists in every mature B2B portfolio.
Practical Application
The same cohort with €1,200,000 initial MRR, €45,000 contraction, and €60,000 churn generates a GRR = (1,200,000 - 45,000 - 60,000) / 1,200,000 = 91.25%. With a 106.25% NDR on the same cohort, the 15-point gap shows how much expansion is compensating for only fair baseline retention.