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Table Figure 1 Growth that compounds

The Gross Revenue Retention governance card

Examine how starting cohort ARR decays through contraction and churn to reveal the unvarnished retention floor.

Retention dimensionOperational scopeFormula impactGovernance failure if omitted
Starting baselineActive cohort ARR on day zeroDenominator ($t_0$)Mid-period new customers inflate the baseline
Churn leakageComplete contract cancellationsDeducted in numeratorDeparted customers treated as ongoing relationships
Contraction dragSeat cuts, downgrades, usage dropsDeducted in numeratorPartial defection hidden inside aggregate revenue
Expansion exclusionUpsells, add-on modules, price hikesStrictly zero ($0.00$)Upsells offset core product dissatisfaction
Theoretical maximumExactly 100%Ceiling constraintHigh NRR creates false confidence in product retention

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Reference & Evidence

Source: Author's retention-governance framework grounded in cohort survival analysis and customer equity research from Lemmens and Gupta (2020), Reinartz and Kumar (2000), and Rust et al. (2004).