Net Dollar Retention (NDR)

Net dollar retention is a metric that is used to measure the growth of a subscription-based business. It is calculated by taking the total amount of revenue that a business has generated from its existing customers in a given period, and subtracting the amount of revenue that it has lost from churned or downgraded customers. The resulting number represents the net increase in revenue that the business has generated from its existing customer base. This metric is a good way to track the overall health and growth of a subscription-based business, as it takes into account both customer acquisition and customer retention.

Definition

Definition

$NDR(\Delta t)={\frac {bARR+E_{x}-D-C}{bARR{\overline {x}}+eARR}}$

Details

bARR E_x xpansion - Downsell - Churn

Standardization Status

Request for Comments (RFC): 22/0021 - Customer Acquisition Cost (CAC)
Type: metric
Version: 0.9
Status:proposal

See also

• Customer Lifetime Value (CLV)

Sources

• What is Customer Acquisition Cost (CAC)? (productplan.com)