Once revenue is recurring, it has to be measured consistently. Annual recurring revenue (ARR) is the annualized value of recurring subscription contracts at a point in time, excluding one-time fees, while monthly recurring revenue (MRR) is the normalized monthly value of all active subscription contracts. Average contract value (ACV) is the average annualized revenue of a closed contract, calculated as total contract value divided by years. Each of these is best computed once, in one canonical place, and reused everywhere downstream.
Retention is measured along two axes. Gross revenue retention (GRR) is the percentage of starting recurring revenue retained from existing customers, excluding upsell and capped at 100%. Net revenue retention (NRR) includes expansion revenue from existing customers, so it can exceed 100%. The difference between the two is precisely whether expansion is counted in; a top-quartile B2B SaaS company often reports NRR in the 110–120% range or higher, indicating expansion meaningfully exceeds churn. Negative churn occurs when expansion revenue from existing customers exceeds revenue lost to churn, so net MRR grows even without new logos.
Churn itself can be measured in two complementary ways. Logo churn is the percentage of customer accounts lost over a period, regardless of revenue size, while revenue churn is the percentage of recurring revenue lost, which differs from logo churn when customers vary widely in size. Churn analysis examines why customers leave or downgrade so teams can improve retention, and a renewal motion is the structured process for retaining customers at the point their contract or subscription is up for continuation. Expansion revenue is the additional revenue from current customers through upgrades, add-ons, or seat growth.
Cohort analysis groups customers by a shared start date and tracks their retention or expansion behavior over time, and the resulting retention curve plots the percentage of a cohort still active at each subsequent period, revealing churn patterns. Usage heatmaps visualize feature adoption or login activity across customer segments to spot adoption gaps. A health score combines product usage, support tickets, NPS, and other signals into a numeric indicator of customer risk or expansion potential. Reported win rate benchmarks vary widely, but a commonly cited range for B2B SaaS is roughly 20–30%, with SMB higher and enterprise lower.