At Alunta we have decided to createa a dictionary for words and important terms related to running a subcription busniess. You are now reading about “Net Revenue retention (NRR)”.
Net Revenue Retention (NRR) is crucial for a subscription business model because it measures the growth or contraction of existing customer revenue, excluding new customer revenue. This metric helps businesses understand if they are making more money from their existing customers over time, which is often a more cost-effective way of increasing revenue than acquiring new customers. High NRR indicates that existing customers are spending more over time, either by upgrading their subscriptions or purchasing additional services, which is a strong sign of customer satisfaction and product-market fit.
A company can improve its Net Revenue Retention (NRR) by focusing on customer success and upselling or cross-selling strategies. Ensuring customer satisfaction and success can lead to both contract renewals and upgrades. Upselling offers existing customers more extensive or premium versions of the company's service, while cross-selling offers complementary services. Both strategies can increase the total revenue from existing customers. Offering excellent customer support and regular check-ins can also prevent churn and improve NRR.
Check out other topics in our subscription dictionary below. We've gathered the ones we find most relevant in relation to net revenue retention (nrr).
