Which segments retain best?
№ 178 · GRR by segment
Definition
MetricGross revenue retention by customer segment
Unit% of the segment's year-ago ARR retained excluding all expansion
Bar of gross retention percent per customer segment. Strict retention before counting upsell. Build by computing retained ARR divided by starting ARR per segment, excluding upsell. Reveals where logo churn is concentrated. Example: Enterprise 96%, Mid 91%, SMB 78% (SMB needs fixing).
- GRR
- Gross revenue retention. Same as NRR but with expansion excluded, so it caps at 100 percent.
- ARR
- Annual recurring revenue. MRR at period end multiplied by 12, or the annualised value of active contracts.
- SMB
- Small and medium business. Segment label, usually under 200 employees or a defined contract-value band.
Benchmarks
| Bottom 30% | Median | Top 30% |
|---|---|---|
| 80% to 82% | 88% | 94% to 96% |
Private B2B SaaS, cohort method, ARR from the segment's customers at period start measured twelve months later including churn and downsell but excluding upsell, cross-sell and price increases. Segment normally cut by ACV band. CY-2024 data. · Benchmarkit reports 88% median GRR (n=225) for CY-2024, down from 90% three years earlier, and flags possible participant selection bias in that decline. Vista Point independently reports an 88% median across its represented companies, though that is 2021 data. KeyBanc and Sapphire sit slightly lower at 86% for 2023 with recovery toward 90% expected, a divergence that most likely reflects a larger average company size in their sample. Top30 uses ChartMogul's best-in-class B2B figure of around 95% and Benchmarkit's 96% top quartile under usage-based pricing. GRR cannot exceed 100% by construction, so the distribution is left-skewed and a median-to-top gap of six to eight points is structurally normal rather than a sign of weak performance. The segment cut matters more here than on any other card: Benchmarkit and SaaS Capital both find GRR rises with ACV, so a blended company GRR conceals the segment that is actually leaking.
| Category | Bottom 30% | Median | Top 30% |
|---|---|---|---|
| ACV under $10K (SMB) | under 78% | 82% to 85% | 88% to 90% |
| ACV $25K to $100K (mid-market) | 82% | 88% | 93% |
| ACV above $100K (enterprise) | 87% | 91% to 93% | 96%+ |
| Usage-based pricing, any ACV | 88% | 92% | 96% |
When it looks bad
The segment bars are ordered the wrong way round, with the largest-ACV segment retaining no better than the smallest, which breaks the normal relationship and usually means the enterprise accounts were sold into a use case the product does not actually serve.
SMB 86%, mid-market 84%, enterprise 83%. Enterprise is 40% of ARR and is retaining worst, so the blended 85% figure understates the exposure: the losses are concentrated in the accounts that took longest to land and cost the most to acquire.
What to do about it
- Split churned ARR into voluntary and involuntary before doing anything else. Recurly's network puts median annual involuntary churn at 1.25% overall and 1.06% in SaaS, recoverable with retry logic, dunning sequences and a card updater, so a card-billed SMB segment can be recovering one to two points of GRR from a billing fix rather than a CS fix.
- Run cohort GRR by acquisition source for the worst segment. Non-regrettable churn from customers outside the ICP is a different problem from regrettable churn, and SaaS Capital notes that an ICP refocus produces a burst of the former while the GRR to NRR gap widens.
- Move the renewal conversation to 120 days before term for the segment below benchmark and require a named economic buyer on the account plan. Where GRR is low and NRR is propped up by expansion, the failure is normally that renewal is being handled by the day-to-day user who has no budget authority.
- Where the low-GRR segment is also low-ACV, model the exit before modelling the fix. At an 82% GRR and a $9K ACV, the segment may not clear its cost to serve, and Benchmarkit's finding that GRR rises with ACV suggests the ceiling is structural rather than fixable by effort.
Sources
- Benchmarkit (with Pavilion) Median NRR 101% (down from 105% in CY-21, 103% in CY-22). Median GRR 88%, down from 90% over three years. Expansion ARR is 40% of total new ARR at median, 58% at $50M to $100M ARR, 67% above $100M. Expansion CAC ratio $1.00 versus new customer CAC ratio $2.00. Subscription gross margin 81% median. GRR and NRR both rise as ACV rises. 5242563.fs1.hubspotusercontent-na1.net ↗
- SaaS Capital Companies with ACV between $25,000 and $50,000 report median NRR of 102%, top quartile 111%, bottom quartile 97%. NRR correlates positively with ACV. Companies with the very highest ACVs report the highest GRR. NRR defined as December 2024 MRR from customers present in December 2023, divided by total December 2023 MRR. saas-capital.com ↗
- KeyBanc Capital Markets and Sapphire Ventures Gross retention is expected to approach the 90% threshold after declining to 86% in 2023. Net retention has remained above 100% through the same period with modest improvement expected. YoY ARR growth expected to accelerate from 15% in 2024 to 20% in 2025. sapphireventures.com ↗
- KeyBanc Capital Markets and Sapphire Ventures Gross retention and net retention have remained relatively consistent at roughly 90% and roughly 101% respectively, and are expected to stay there. sapphireventures.com ↗
- ChartMogul Top quartile NRR by ARR band: 94% at $1M to $3M, 99% at $3M to $15M, above 105% at $15M to $30M. 41.1% of businesses with ARPA above $500 per month hold NRR above 100%, versus 2.7% below $10 ARPA. Best-in-class GRR is around 95% for B2B; 35.7% of businesses above $500 ARPA hold GRR above 85%. Top quartile customer retention is 90% at three months and 70% at twelve months, rising to 93% and 77% at $15M to $30M ARR. chartmogul.com ↗
- Vista Point Advisors Median gross revenue retention 88% with a long tail toward lower retention. Median logo retention 89%. Enterprise-focused software should reach at least 90% logo retention to be considered best in class. Logo retention behaves as a qualification checkbox rather than a valuation driver. vistapointadvisors.com ↗
- SaaS Capital Average GRR to NRR gap is a little over 12 percentage points. A range of 8 to 20 points is normal. Fewer than 10% of companies report a gap under 5 points, which signals weak upsell and cross-sell. Gaps above 30 points are rare and usually indicate a one-off or a concentration problem. saas-capital.com ↗
- Recurly Median annual involuntary churn across industries is 1.25%, ranging from 0.18% for high-ARPC businesses to 1.69% in higher-risk sectors. SaaS sits at 1.06%. Involuntary churn falls 87% from the lowest to the highest ARPC tier and is recovered through intelligent retry logic, automated dunning and account updater services. recurly.com ↗
- ChurnZero NRR and GRR fell from 2022 through 2024 and stabilised in 2025. Presence of specific post-sale roles is associated with higher NRR: customer enablement 99% versus 94% without, CSMs 98% versus 90%, support 98% versus 93%, account management 98% versus 94%. churnzero.com ↗