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Gross Dollar Retention Rate

The share of ARR retained from existing customers, accounting for Contraction, Churn, and Expansion.

What is Gross Dollar Retention Rate?

Gross Dollar Retention Rate (GDR) is a measure of the revenue retained from existing customers over a specific period, not including additional revenue from upsells or expansions. It's vital for understanding how well a business keeps its revenue base stable.

Why is Gross Dollar Retention Rate Important to Measure?

Gross dollar retention (GDR) rate is a critical performance metric for assessing the overall health, growth, and long-term resilience of a business. It's particularly important for SaaS-B2B companies, that often make substantial investments in customer acquisition. The benefits of this metric include:

  • Key Health Indicator: Essential for evaluating a company's resilience and growth potential, especially for SaaS and B2B sectors.
  • Customer Loyalty Insight: A high GDR suggests strong customer satisfaction and retention, while a low GDR highlights areas needing improvement.
  • Strategic Planning: Guides revenue stability assessments, budget planning, and customer retention strategies.

How is Gross Dollar Retention Rate Calculated?

GDR is calculated by subtracting revenue lost from churn and contractions from the starting Annual Recurring Revenue (ARR), divided by the starting ARR.

Formula

Gross Dollar Retention Rate =Starting ARR - Churn - ContractionStarting ARR

Also known as: GDRGross revenue retention rateGross retained revenue rateCustomer revenue retention rateCustomer dollar retention rate

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Gross Dollar Retention Rate
Gross Dollar Retention Rate
The share of ARR retained from existing customers, accounting for Contraction, Churn, and Expansion.
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