Early on in Covid many businesses, of course, worried about the ways that Covid would affect their business. Many made various contingency plans and quite a few adjusted spending (marketing, sales, hiring, etc) in anticipation of Covid’s impact. While in hindsight I think many (in the tech world, I’d probably say most) companies ended up faring better than they expected, some did not and I think even those that ended up being fine were happy that they took the matter seriously and had contingency plans, even if not all of those plans needed to be implemented. As we begin to come out of Covid there’s another kind of business impact that I think is important to anticipate and plan for….
Archives / March, 2021
Net Dollar Retention vs. Net Revenue Retention
Net Dollar Retention (NDR) and Net Revenue Retention (NRR) are both important measurements in any business but many companies conflate the two or (more frequently) only report on one. Both are key metrics but for different reasons. Equally important is separating out NRR for your largest customers versus the rest of your customers since often the behavior of large customers is markedly different than average customers. Their effect on a business and can be hidden in aggregate data and a sense of their impact is lost. NDR and NRR are as defined as follows: NDR measures the average percentage change in revenue over the first 12 months of a customer. NRR measures the percentage of revenue retained from all customers…