Which Is Better: NRR or Customer Lifetime Value?

In this Episode

Net Revenue Retention (NRR) is a very valuable CS metric. However, measuring success over a longer term may require more sophisticated metrics such as Customer Lifetime Value.

Transcription

RICK ADAMS:
My prediction for 2022 is that we’re gonna go further and look at overall Customer Lifetime Value.

So, NRR is about… have we increased the revenues on average with our customer this period over last period, alright? But that is still a short-term look, right? Right now, what is the position?

But what about over the term? What about over the long term? How long can we retain that customer as a customer for as well as how much can we sell to that customer — combined. The combination of retaining the customer, plus getting more revenue per sale to that customer… that is what equals true, ultimate value to the business. So, I think that we will see this trend continue with yet more sophisticated ways of calculating that internally.

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