Two kinds of churn

Logo churn is the percentage of customers who leave in a period. Revenue churn is the percentage of revenue lost, not the same number, because losing your smallest customer and losing your biggest customer both count as "one logo," but they don't cost the same.

GRR and NRR

GRR (gross revenue retention) asks: of the revenue that existed a year ago, how much is still here, counting only losses and downgrades, never new sales? NRR (net revenue retention) asks the same question but also counts expansion (existing customers buying more) and nets it against contraction (existing customers buying less). NRR above 100% means existing customers alone are growing revenue, before a single new logo is signed, the single most-watched number in SaaS-style PE diligence, because it answers "is this business healthy on its own, independent of the sales team's ability to keep finding new customers?"

NRR (net revenue retention): the percentage of last year's revenue from existing customers that's present this year, after churn, downgrades, and expansion; above 100% means the existing base is growing on its own.
  • Meridian's GRR: 92% (8% of last year's revenue was lost to churn and downgrades)
  • Meridian's NRR: 118% (expansion from existing stores adding more than makes up for that loss)

That 118% NRR is the strongest single fact behind Meridian's thesis in Lesson 5. Hold onto this number: it's the one that moves the most by the time the Advanced tier picks the story back up.

Starting ARR of £100m, indexed. GRR (92%) and NRR (118%) are the same bridge, read to different stopping points.

Checkpoint

  • Logo churn: % of customers lost.
  • Revenue churn: % of revenue lost, not the same thing as logo churn.
  • GRR: retention counting only losses/downgrades, never new sales.
  • NRR: GRR plus expansion from existing customers, can exceed 100%.

If anything here still feels unclear, ask before moving to Lesson 9.