SaaS organizations are always on the lookout for new and better ways to stay on top of their customer's needs and still turn a profit at the end of the day. There are all kinds of software that a SaaS company could download to help with those efforts, but if they aren't sure of what to focus on, then the effort could be wasted.
Net dollar retention (NDR), or net revenue retention (NRR), is the metric we will discuss in this blog, and it might just be the most critical measure for business success that is often overlooked. Our goal with this blog is to help organizations better understand the importance of NDR/NRR and help with improving net revenue retention.
Is Net Dollar Retention the same as Net Revenue Retention?
Before we can jump into NDR's importance, we think it is necessary to clear the air on the common confusion around this topic. As you may have noticed in the introduction, we used NDR and NRR interchangeably, and that is because these terms do indeed mean the same thing. You might even come across the term net cash retention as well, but don't worry, that also means the same thing.
The reason for the variety is due to how different countries use various types of currencies and language to discuss these matters. While net dollar retention may make perfect sense, it could become quite confusing in another country that does not use the dollar. As a heads up, we may use different terms throughout this piece.
Why is Net Dollar Retention important?
So, why exactly is this data point so vital? The answer is twofold. NDR is essential because it helps companies measure customer retention and their ability to keep the customers engaged. This leads to an easier time delivering innovations that meet or exceed established business goals. Keeping a watchful eye on this metric allows for an organization to make more proactive decisions, rather than reactive ones that a majority of businesses are forced to make. Companies can build more efficient workflows and standards based on their NDR rate. To further drive home how vital net dollar retention is, here are two other significant takeaways.
NDR shows:
How much growth you're able to generate without acquiring any new customers.
How satisfied your existing customers are with the value exchange you're providing, which reflects the strength and stickiness of your product and proposition.
Our team understands that managing another metric is something that sounds like a nightmare to some companies. That is why Planhat is a great source of information for finance teams to keep track of performance reporting and forecasting in real time.
What is a good Net Dollar Retention?
Now that we know this data point is invaluable to the success of an organization (especially SaaS companies), what is a good NDR to shoot for? A good net dollar retention benchmark to aim for would be over 100%. It should be noted that this mark is generally for enterprise-level companies, while small or medium-sized organizations can aim for the 90% to 100% range.
However, generalities are there as a good starting point but might not always be the most useful. Doing some preliminary research on companies that are about the same size and in the same industry can give you an idea of where you stack up with the competition. Not every company releases NDR data, but in 2018, Crunchbase found that of the companies that share their scores, the average between the top 10 SaaS companies was 125%. Overall, from all the data they gathered, if you are below 100% (in most cases), there needs to be some change to improve, and if you are above 125%, you are doing phenomenal.
How to improve Net Revenue Retention?
Planhat: Net Dollar Retention demystified
Enterprise Account Executive
Planhat
Doa is a top-performing SaaS sales leader with over 15 years of experience spanning enterprise sales, customer success, and revenue operations. At Planhat, she most recently served as an Enterprise Account Executive—ranked #1 globally in her category for 2024—driving standout results and consistent performance. Prior to Planhat, Doa led customer success and key account teams at Meltwater and held multiple roles at JPMorgan Chase, where she developed deep operational and commercial acumen. She brings sharp execution, cross-functional fluency, and a relentless focus on delivering value to global customers.
