Customer Success
NRR Simulator
A cohort's net revenue retention, its three components, and what a scenario moves.
The problem
Net revenue retention reaches the board pack as one number. Three movements pulling against each other produced it, and the total shows none of them. A stable but undeveloped base reads exactly like a leaking base rescued by a handful of fast-growing accounts. The plan and the headcount those two situations call for have nothing in common, and the figure on its own does not say which of the two applies.
The calculation lives in a spreadsheet rebuilt for every review, one nobody can reproduce a quarter later. Definitions drift on the way: a downward renegotiation books as contraction once and as partial churn the next time. The series stops being comparable and scenario discussion stalls for want of a shared basis. The simulator fixes the conventions and shows the gap between two assumptions.
NRR Simulator
How to read the result
Input
- Opening recurring revenue for the cohort
- Expansion: upsell, cross-sell, contracted volume increases
- Contraction: downgrades, seat reductions, downward renegotiations
- Churn: revenue from accounts lost outright
- Scenario tested: expansion points gained or contraction points avoided, each slider capped at 20 points of opening revenue
How to read the result
- Opposite structures produce identical totals: NRR only reads alongside its components and the GRR, which isolates retention of the installed base
- Point for point, expansion and avoided contraction move NRR equally: what separates them is how much room each has in this cohort
- Above 100%, broad contraction can sit in the shadow of a few concentrated expansions
- What gets settled next: defend the installed base, or fund growth
Limits
- The cohort is closed. No new-logo revenue enters it, and total company growth stays outside the frame.
- An account already lost but still inside its notice period appears nowhere: this is a closed-period measure, and the loss lands in the next one.
- Expansion shows as an amount, with no cause attached. An indexed price increase looks identical to usage-driven growth, though only one of them repeats.
- The scenario holds the other components still. Badly calibrated upsell pressure on fragile accounts feeds contraction all the same, and the arithmetic does not carry it.
Useful for framing a budget round or a portfolio review. The reported figure for the period is produced somewhere else. An unreadable entry leaves the last valid value in place with a message, and any value brought back to a limit is flagged. Numbers are read according to the language of the page: comma or point in French, point in English, comma in German and Spanish.
In the glossary
A first thirty-minute conversation
The tool gives the order of magnitude. The decision that follows can be discussed in thirty minutes.