Gross revenue retention: The key metric for UK retailers
Samir Kamnani
·March 27, 2025
While a basic Cost of Goods Sold (COGS) formula can help you assess your profitability over a period of time, it’s just as important for UK retailers to track metrics tied to your customer loyalty.
If a high percentage of your customers make repeat purchases on an ongoing basis, then you won’t be under as much pressure to pay for advertising costs. It can cost 5 to 10 times more to acquire a new customer than to keep an existing customer. Loyal customers are also worth more in terms of transaction value: Existing customers tend to spend 67% more than new customers.
If your brand offers products with recurring subscription costs, such as subscription boxes or supplements, an important loyalty-related metric to pay attention to is your gross revenue retention (GRR).
In this article, we’ll look at what that means and how to determine it.
What is GRR?
Your gross revenue retention is a metric focused on the percentage of revenue retained from existing customers over a specific period of time. Your GRR does not include any revenue from new customers or upsells/expansions, so it stands as a purely retention-focused metric that helps you analyse your customer loyalty v. customer churn.
To determine your GRR, you can use the following formula:
For example, let’s say a nutritional supplements company started the quarter with £100,000 in revenue from existing customers, with customers paying anywhere from £30 to £150 per month, depending on their personalised subscription package.
During the quarter:
- Customers who churned accounted for £10,000 in lost revenue.
- Customers who downgraded their plans resulted in a £5,000 revenue loss.
In this case, the company’s GRR would be 85%, representing a relatively strong customer retention rate.
Why GRR is important
For subscription-based companies, paying close attention to your GRR is important for a number of reasons:
- Monitoring the health of your customer base: Even if you’re adding customers quickly, a low GRR shows that they’re churning at a high rate, so you may be spending a disproportionate amount on advertising costs to replace lost customers. In contrast, a high GRR shows that the majority of your customers are committed to your brand.
- Understanding the impact of business changes: Did you recently change your pricing structure, or phase out certain product types? By tracking these changes in line with your GRR, you’ll be able to identify their impact on customer retention rates.
- Predicting long-term revenue: A high GRR points to a relatively stable path for ongoing revenue. In contrast, a low GRR shows that you’ll likely need to continue focusing on spending big on customer acquisition strategies to replace customers who are churning.
- Attracting investors: If your company is fundraising, GRR is a key metric that potential investors will consider to ensure that your brand has the financial stability they are looking for.
- Optimising customer retention: As you make changes to your customer experience—such as adding chatbot technology, improving your product quality, or implementing real-time delivery tracking—pay close attention to how your GRR changes. You’ll be able to see which of these changes helps you to improve your customer retention, paving the way for further optimisation based on successful results.
Businesses with a high GRR tend to see improved long-term profitability, higher customer lifetime value, and more predictable revenue rates. The better your GRR is, the more sustainable your brand is.
Revenue retention is top of mind for UK brands in 2025 (and beyond)
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Get exclusive accessCommon reasons for a low GRR
Is your GRR lower than you’d like to see? Some potential contributing factors include:
Lack of perceived value
If the shopper isn’t seeing the product benefits they expect, they’re likely to cancel their subscription. For instance, a customer may cancel an acne medicine subscription service because they didn’t see their skin clear up in the first three months.
What you can do: Build out educational materials and onboarding communications that showcase the benefits of long-term product use, and showcase some of the more subtle benefits of your product. Doing so will make shoppers more likely to continue using your product for a longer period to evaluate the benefits.
Poor customer support
Shoppers who buy a subscription are invested in your brand—and when you fail to deliver by making it hard for them to find the answers to their questions, or taking days to respond to support requests, they’ll likely feel alienated from your brand.
What you can do: Implement technology like chatbots, which helps shoppers use self-support to instantly find the answers to their questions and resolve simple problems, and a returns management solution that supports streamlined, hassle-free returns. Shoppers will have a positive user experience, and your CX team will be freed up to handle more complex issues that require a human touch.
Lack of engagement
Maybe a shopper was excited about getting a subscription to your monthly box when they first signed up, but several months in, the novelty has worn off, and they’re considering cancelling their membership.
What you can do: If your subscription service includes a box of new goodies every month, focus on high-quality previews: Promote each month’s products in advance with fun and creative social media content, as well as emails direct to your customers’ inboxes to get them excited for the upcoming release. If your subscription product doesn’t change, it’s more important to find new ways to showcase the product’s benefits each month: For instance, with a sleep aid product, your newsletter can focus on diverse topics like “reasons why you’re not sleeping well,” “meditation practises to help you sleep,” and other engaging content that will help your customers retain interest in the product.
Gross revenue retention v. net revenue retention
Along with GRR, you should also measure your brand’s net revenue retention (NRR). NRR includes all of the same metrics as GRR, but also factors in upsells and expansions. This metric can help you determine how well you’re expanding your revenue from existing customers by promoting new offers and upsells. For subscription-based companies, both metrics are important for helping you evaluate the health and profitability of your existing customer base.
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