[GTM glossary](/glossary.md) Capped retention rate (CRR)

GTM Strategy & SaaS Metrics

# Capped retention rate (CRR)

Also known as: CRR

In short

Capped retention rate (CRR) is a retention metric that compares current revenue from a starting group of customers with their starting revenue, but caps each customer at the amount they originally paid. Upsell and expansion are not counted.

Because expansion is excluded, CRR shows how much existing revenue you kept, much like gross revenue retention. The cap stops a few growing accounts from masking losses elsewhere.

## How to calculate CRR

For each customer in the starting cohort, take the lesser of current revenue and starting revenue. Add those amounts and divide by total starting revenue.

* **Example:** Say three customers each start at 100. After a year, one pays 150, one pays 100, and one has churned to 0. Capped values are 100, 100, and 0, so CRR is 200 / 300, or about 67 percent.
* **Compare:** Uncapped, the same cohort retains 250 / 300, or about 83 percent, which hides one lost customer.

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## CRR vs. net revenue retention

Net revenue retention includes expansion, so growth in some accounts can offset churn in others. CRR removes that offset. Use NRR to see overall growth from the base and CRR to see how well you keep what you already have.

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## How GTM teams use CRR

### Spot hidden churn

If NRR looks healthy but CRR is low, expansion is covering for losses. That may signal a product-fit or onboarding problem.

### Evaluate segments

Compare CRR across segments or acquisition sources to see where customers stay.

### Guide ICP decisions

Segments with low CRR may need stricter qualification.

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## Common mistakes

* **Mixing cohorts:** Measure only customers present at the start of the period, not new ones.
* **Forgetting the cap:** Without capping, the metric becomes NRR.
* **Using one period:** Track it over several periods to see trends.

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## Capped retention rate (CRR) FAQs

**What is capped retention rate (CRR)?**

Capped retention rate measures how much revenue you kept from a starting group of customers, limiting each customer's contribution to what they originally paid. This removes expansion, so the result reflects churn and downgrades only.

**How do you calculate capped retention rate?**

For each starting customer, take the smaller of current and starting revenue, add those amounts, and divide by total starting revenue. If capped values total 200 on a starting base of 300, CRR is about 67 percent.

**What is the difference between capped retention rate and net revenue retention?**

Net revenue retention counts upsell and expansion, so growth can offset churn. Capped retention rate limits each account to its starting amount, so it shows only how much existing revenue was kept and cannot be inflated by expansion.

**Why use capped retention rate instead of only NRR?**

NRR can look strong when a few accounts expand a lot while many others leave. CRR exposes that by ignoring expansion, helping teams see whether customers actually stay and where onboarding, fit, or product issues cause losses.

Share term

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## More related phrases

* [Average revenue per account (ARPA)](/glossary/average-revenue-per-account.md)
* [Committed monthly recurring revenue (CMRR)](/glossary/committed-monthly-recurring-revenue.md)
* [Customer retention](/glossary/customer-retention.md)

## Similar phrases

* [Gross revenue retention (GRR)](/glossary/gross-revenue-retention.md)  
Gross revenue retention (GRR) is the percentage of recurring revenue a company keeps from existing customers after churn and downgrades, excluding any expansion revenue.
* [Net revenue retention (NRR)](/glossary/net-revenue-retention.md)  
Net revenue retention (NRR) measures how recurring revenue from existing customers changes over time, including upsell, downgrades, and churn.
* [Revenue churn](/glossary/revenue-churn.md)  
Revenue churn is the share of recurring revenue lost in a period to cancellations and downgrades, shown as a percentage of revenue at the start of the period.
* [Logo retention](/glossary/logo-retention.md)  
Logo retention is the percentage of customers, counted by account rather than revenue, that you keep over a period. It is the inverse of logo churn.
* [Retention rate](/glossary/retention-rate.md)  
Retention rate is the percentage of customers, or revenue, a company keeps over a given period, and it shows how well a business holds on to the customers it wins.