Define the starting population before comparing retention, churn and expansion.
Fix the cohort before measuring change
A cohort is a defined starting group. Customer retention asks how many members of that original group remain. New accounts acquired later belong to a separate group. Revenue retention follows the recurring revenue of the starting accounts, so an expanding account can raise revenue even when the customer count is unchanged.
Use one period and revenue definition
Record the start date, end date and whether amounts represent contracted, billed or recognised recurring revenue. Do not mix an annual contract value with a monthly recurring figure. Keep refunds, pauses and currency conversion rules consistent. A retention percentage without this record is difficult to compare with another team’s report.
Read gross and net retention together
For a starting revenue base of 100,000, churn of 6,000 and contraction of 4,000 leave 90,000 before expansion. Gross revenue retention is 90%. If the same accounts add 10,000 of expansion, net revenue retention is 100%. New-customer sales are excluded from both calculations; including them conceals what happened to the starting base.
Investigate the accounts behind the ratio
Segment the result by renewal window, contract size and account tenure. One expanding customer can offset several lost accounts. Link the ratio to the account list and cancellation reasons before changing service capacity or forecasts. A short observation window may not include every renewal, so avoid treating its result as a full-year retention expectation.
Review record
| Source | Convention | Result | Next check |
|---|---|---|---|
| Record the measured or supplied values. | State units, period and inclusions. | Retain the original calculation. | Name the person and evidence needed before use. |
Continue the decision
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Keep the displayed formula, input units and model scope with the result. Corrections or questions can be sent through the request section on this page.