How to Handle Reactivation MRR in GRR vs NRR
Description
In episode #297, Ben Murray tackles a common SaaS metrics question: How should reactivations be treated when calculating gross and net revenue retention (GRR & NRR)?
Key takeaways:
Reactivated customers (e.g., those who churned quickly but later update payment info) should not be included in new revenue — doing so skews CAC and CAC payback metrics.
Gross Revenue Retention (GRR) only accounts for contraction and churn — reactivations don’t belong here.
Net Revenue Retention (NRR) is where reactivations should be recorded — they’re essentially recovered revenue from existing customers.
SaaS companies with high first-month churn (e.g., due to onboarding issues) may consider calculating an adjusted retention metric.
Ben also highlights his new AI chatbot on TheSaaSCFO.com — trained on his blog content for instant SaaS finance answers.
Level up your SaaS knowledge here: https://www.thesaasacademy.com/
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