Why benchmarks matter (and mislead)
Net revenue retention is the single best indicator of product-market fit. It tells you whether customers are getting more value over time (expansion) or less (contraction and churn).
But without context, benchmarks are dangerous. A 105% NRR means something very different at $2M ARR than at $50M ARR. It means something different for a $5K ACV product than a $200K ACV product. And it means something different in 2026 than it did in 2021.
The 2026 NRR landscape
NRR across SaaS has compressed significantly from the highs of 2021. Median NRR for public SaaS companies dropped from ~105% in 2021 to ~101% by 2024-2025. The drivers:
- Vendor consolidation: Companies cutting tools, not adding them
- Budget scrutiny: Every renewal gets a harder look from finance
- Seat-based pricing pressure: Teams are smaller, usage-based models expose underutilization
This compression means that benchmarks from 2021-2022 are no longer relevant. What was "median" then is now "top quartile."
NRR benchmarks by stage
Series A ($1-5M ARR)
| Percentile | NRR |
|---|---|
| Top Quartile | 110%+ |
| Median | 98-102% |
| Bottom Quartile | <90% |
What to know: At Series A, gross retention rate (GRR) matters more than NRR. You don't have enough accounts for expansion to be systematic. Focus on keeping customers first. If your GRR is below 85%, you have a product-market fit problem that expansion can't mask.
Series B ($5-20M ARR)
| Percentile | NRR |
|---|---|
| Top Quartile | 115%+ |
| Median | 102-106% |
| Bottom Quartile | <95% |
What to know: Series B is where NRR starts to become a growth lever. You should have enough accounts to see patterns in expansion and contraction. Look at NRR by cohort — if newer cohorts are retaining worse than older ones, your product-market fit may be narrowing as you move upmarket or downmarket.
Series C ($20-50M+ ARR)
| Percentile | NRR |
|---|---|
| Top Quartile | 120%+ |
| Median | 106-110% |
| Bottom Quartile | <100% |
What to know: At Series C, expansion should be a meaningful growth engine. Best-in-class companies generate 40-60% of new ARR from existing customers. If your NRR is below 100% at this stage, you're fighting gravity — new customer acquisition has to outrun the hole in the bucket.
NRR benchmarks by ACV
Stage isn't the only lens. Average contract value significantly impacts retention dynamics:
| ACV | Median NRR | Top Quartile | Bottom Quartile |
|---|---|---|---|
| <$5K | 95-100% | 105%+ | <85% |
| $5K-$25K | 100-105% | 112%+ | <92% |
| $25K-$100K | 105-110% | 118%+ | <97% |
| >$100K | 110-115% | 125%+ | <100% |
Higher ACV typically correlates with higher NRR because enterprise accounts have more expansion surface area (more seats, more departments, more use cases) and higher switching costs.
GRR: The metric you might be ignoring
Gross revenue retention measures retention without expansion. It tells you how much revenue you'd keep if you never upsold anyone. It's the foundation that NRR builds on.
| Segment | Median GRR | Top Quartile |
|---|---|---|
| SMB | 80-85% | 90%+ |
| Mid-Market | 88-92% | 95%+ |
| Enterprise | 92-95% | 97%+ |
The rule: If your GRR is below 85%, fix churn before investing in expansion. Expansion on a leaky bucket is just a more expensive way to tread water.
The expansion question
How much of your new ARR should come from existing customers? The answer depends on stage:
| Stage | % of New ARR from Existing |
|---|---|
| Series A | 15-25% |
| Series B | 25-35% |
| Series C+ | 40-60% |
As you scale, the ratio should shift toward existing customers. New logo acquisition gets more expensive. Existing customer expansion gets more efficient. The best companies build this flywheel deliberately.
What benchmarks don't tell you
Benchmarks give you a target. They don't tell you how to hit it. A few things to keep in mind:
- Cohort quality varies. Your 2023 cohort may retain differently than your 2025 cohort. Blended NRR can mask degradation in recent cohorts.
- Segment mix matters. If you're adding more SMB customers, your blended NRR will trend down even if retention improves within each segment.
- Leading indicators matter more than the number itself. A company at 105% NRR with declining usage across accounts is in worse shape than one at 100% NRR with increasing engagement.
The real question
Knowing where you stand against benchmarks is step one. The harder question is: do you have visibility into what's driving your NRR at the account level?
Companies that consistently beat benchmarks don't just track NRR. They understand which accounts are expanding, which are contracting, and which are at risk — and they act on that information before the quarter ends.
The benchmark tells you where to aim. Your signal infrastructure tells you how to get there.
Sources
- BenchmarkIt (2025-2026 SaaS retention benchmarks)
- SaaS Capital (annual retention survey)
- ChartMogul (SaaS retention data)
- Growth Unhinged (Kyle Poyar's analysis)
- Pavilion (private company benchmarking data)
Eru shows you exactly which accounts are driving your NRR — and which ones are at risk — so you can hit your number before the quarter ends.
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