{"id":16255,"date":"2023-03-29T15:24:52","date_gmt":"2023-03-29T19:24:52","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?post_type=sage_glossary&#038;p=16255"},"modified":"2024-05-13T07:51:14","modified_gmt":"2024-05-13T11:51:14","slug":"what-is-net-dollar-retention-ndr","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-net-dollar-retention-ndr\/","title":{"rendered":"What is net dollar retention (NDR)?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is net dollar retention (NDR)?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is net dollar retention (NDR)?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/what-is-net-dollar-retention-ndr\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<p>Net dollar retention (NDR), also referred to as net revenue retention (NRR), tells you about the value your customers perceive your SaaS product to have. <\/p>\n\n\n\n<p>Are they expanding to take on more products or are they contracting their usage of your product and services, whether by downgrade or churn? It is important to measure and track as it showcases the health of your recurring revenue.<\/p>\n\n\n\n<p>NDR is based on your existing revenue base and does not include new customers. It is commonly calculated on a cohort segmentation. <\/p>\n\n\n\n<p>You can analyze the differences in renewal or downgrade behaviors by cohort for greater insight as to where to ramp up customer success initiatives or for clearer profitability metrics on cohorts choosing to downgrade.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"420\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/03\/net-dollar-retention-formula-accounting-financial-management-glossary.jpg\" alt=\"\" class=\"wp-image-16256\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/03\/net-dollar-retention-formula-accounting-financial-management-glossary.jpg 1200w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/03\/net-dollar-retention-formula-accounting-financial-management-glossary-768x269.jpg 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<p>Net dollar retention (NDR), also referred to as net revenue retention (NRR), tells you about the value your customers perceive your SaaS product to have. <\/p>\n\n\n\n<p>Are they expanding to take on more products or are they contracting their usage of your product and services, whether by downgrade or churn? It is important to measure and track as it showcases the health of your recurring revenue.<\/p>\n\n\n\n<p>NDR is based on your existing revenue base and does not include new customers. It is commonly calculated on a cohort segmentation. <\/p>\n\n\n\n<p>You can analyze the differences in renewal or downgrade behaviors by cohort for greater insight as to where to ramp up customer success initiatives or for clearer profitability metrics on cohorts choosing to downgrade.<\/p>\n\n\n\n<p>Bessemer Ventures explores net dollar retention by sub-industries within the SaaS industry in their report,\u00a0<a href=\"https:\/\/www.bvp.com\/atlas\/scaling-to-100-million\" target=\"_blank\" rel=\"noreferrer noopener\">Scaling to $100 Million<\/a>. <\/p>\n\n\n\n<p>The report reflects how it differs based on the sales strategy. Additionally, they state the NDR benchmark is to have a net dollar retention rate over 100%.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Net dollar retention (NDR), also referred to as net revenue retention (NRR), tells you about the value your customers perceive your SaaS product to have. Are they expanding to take on more products or are they contracting their usage of your product and services, whether by downgrade or churn? It is important to measure and [&hellip;]<\/p>\n","protected":false},"author":1309,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[2,110,420],"class_list":["post-16255","sage_glossary","type-sage_glossary","status-publish","hentry","tag-accountants","tag-accounting-101","tag-cloud-financial-management"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary\/16255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1309"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/sage_glossary\/16255\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=16255"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=16255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}