Renewal Rate
Definition
Renewal Rate: Renewal rate measures the percentage of customers or revenue that renews when contracts come up. Gross renewal rate counts only retained revenue; net renewal rate includes expansion. For subscription businesses, renewal rate is existential—small improvements compound dramatically over time. Most SaaS companies aim for 85%+ gross revenue renewal.
Example Usage
“Improving our renewal rate from 82% to 90% was worth $2M in retained ARR that we would have lost.”
Common Misconceptions
Related Terms
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Net Dollar Retention
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Customer Health Score
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