If NRR is above 100%, your existing base grows on its own: recurring revenue rises even if you win no new customers. New sales then stack on top of that growth. Below 100%, the base is leaking, and part of every new sale goes to filling the hole first.

Look at GRR separately. Strong expansion can make NRR look healthy while serious churn hides underneath. Because GRR ignores expansion, it shows the true size of the hole in the bucket. An NRR propped up by a few large accounts expanding drops fast when one of them leaves.

When annualising monthly rates, remember compounding. 98% a month sounds small, but repeated for twelve months it's roughly 78% a year. This tool calculates the annual figure on that assumption. The most accurate annual NRR comes from comparing what last year's customer cohort pays today with what it paid then.

The MRR bridge shows where to focus. If churn is large, find out why customers leave: wrong customers, value not shown, or pricing that didn't fit? If contraction is large, look at packaging and pricing. If expansion is weak, ask whether customers have a way to pay more as they grow.

The "churn eats X% of new sales" line is the easiest number to explain to a team. If a third of new sales goes to replacing lost revenue, one in every three days of the sales team's effort is spent standing still. Reducing churn turns the same sales effort directly into growth.