How to Calculate Renewal Rate: Logo vs Dollar

Here is how I calculate renewal rate, by logo and by dollar. Renewal rate is the share of contracts up for renewal in a period that actually renewed, measured in accounts (logo renewal rate) or in revenue (dollar renewal rate). The renewal rate formula is accounts renewed ÷ accounts up for renewal × 100 for logos, and renewed ARR ÷ ARR up for renewal × 100 for dollars: if 102 of 120 accounts renew and you keep $3.15M of $3.6M in expiring ARR, your logo renewal rate is 85% and your gross dollar renewal rate is 87.5%.

If you only need the number, enter your counts in the free renewal rate calculator. This is the final part of The Renewal Playbook. Part 4 looked at when multi-year renewal deals are worth offering. This part shows how I calculate renewal rate, how it differs from churn and GRR, and the rules that keep the number honest.

How do you calculate renewal rate?

Logo renewal rate         = Accounts renewed ÷ Accounts up for renewal × 100
Gross dollar renewal rate = (ARR up for renewal − Churned ARR − Downgrades) ÷ ARR up for renewal × 100
Net dollar renewal rate   = (ARR up for renewal − Churned ARR − Downgrades + Expansion) ÷ ARR up for renewal × 100

Accounts up for renewal = accounts whose contract end date falls in the period
ARR up for renewal      = the ARR of those accounts before renewal
Churned ARR             = ARR of accounts that did not renew
Downgrades              = ARR lost from accounts that renewed smaller
Expansion               = ARR added at renewal (more seats, a higher plan)

The gross dollar rate counts renewed ARR at no more than its prior value, so it cannot go above 100%. The net dollar rate includes expansion signed at renewal, so it can.

What does a renewal rate calculation look like with real numbers?

Here is an illustrative example. In one quarter, 120 accounts with $3,600,000 in ARR reach their renewal date. 18 churn, taking $360,000. Renewing accounts downgrade by $90,000 and add $270,000 in expansion.

Input	Value
Accounts up for renewal	120
Accounts renewed	102
ARR up for renewal	$3,600,000
Churned ARR	$360,000
Downgrades	$90,000
Expansion	$270,000

1. Logo renewal rate: 102 ÷ 120 × 100 = 85%
2. Gross dollar renewal rate: ($3,600,000 − $360,000 − $90,000) ÷ $3,600,000 = $3,150,000 ÷ $3,600,000 = 87.5%
3. Net dollar renewal rate: ($3,150,000 + $270,000) ÷ $3,600,000 = 95%

Renewal cohort

One quarter's renewal cohort, logo vs dollar

Clarivoxx analysis

Accounts up for renewal120

Logo renewal rate85%

Gross dollar renewal rate87.5%

Net dollar renewal rate95%

The formulas

Logo renewal rate = 102 ÷ 120 = 85%. Gross dollar renewal rate = ($3,600,000 − $360,000 churn − $90,000 downgrades) ÷ $3,600,000 = 87.5%. Net dollar renewal rate adds $270,000 of expansion: $3,420,000 ÷ $3,600,000 = 95%.

Read the gap between logo and dollar first. Here the dollar rate is higher than the logo rate, so the accounts that left were smaller than average: $20,000 each against $30,000 across the cohort. If the dollar rate were lower, you would be losing your larger customers, which is far more serious.

Check your own quarter in the renewal rate calculator and compare it with this example.

How do I calculate renewal rate in Excel?

Put one row per account up for renewal: column A account name, B ARR up for renewal, C renewed (Yes or No), D renewed ARR capped at the prior value, E expansion ARR. With 120 accounts in rows 2 to 121:

Logo renewal rate:          =COUNTIF(C2:C121,"Yes")/COUNTA(A2:A121)
Gross dollar renewal rate:  =SUM(D2:D121)/SUM(B2:B121)
Net dollar renewal rate:    =(SUM(D2:D121)+SUM(E2:E121))/SUM(B2:B121)
Renewed ARR, capped (D2):   =IF(C2="Yes",MIN(new_ARR,B2),0)

Format the three results as percentages. Replace new_ARR with the cell holding the renewed contract value. The cap in column D keeps upsells out of the gross rate.

How is renewal rate different from churn rate and GRR?

Renewal rate is the scorecard for the renewal work itself. The retention metrics you may already report cover more ground:

• Churn rate covers losses across the whole base, whether a contract was due or not. See my churn rate formula.
• Gross revenue retention covers all starting ARR, including accounts mid-contract. See the GRR formula with worked examples.
• Customer retention rate counts customers kept over a period, renewal due or not. My guide on how to calculate customer retention rate covers it.

Say the same company has $14,400,000 in total ARR and only $3,600,000 was up for renewal. All $450,000 of losses came from the cohort.

• Gross dollar renewal rate (cohort only): 87.5%
• Quarterly GRR (whole base): ($14,400,000 − $450,000) ÷ $14,400,000 = 96.9%

Both are correct. GRR shows how durable the revenue base is. Renewal rate shows how well this quarter's renewals were handled. Keep the gross retention vs net retention view next to your renewal report, not in place of it.

Metric comparison

Same quarter, four different retention numbers

Clarivoxx analysis

0%50%96.9%

Logo renewal rate
85%

Gross dollar renewal rate
87.5%

Net dollar renewal rate
95%

Quarterly GRR, whole base
96.9%

GRR runs 9.4 points above the gross dollar renewal rate because only a quarter of ARR was up for renewalQuarterly GRR = ($14,400,000 − $450,000) ÷ $14,400,000 = 96.9%; gross dollar renewal rate = $3,150,000 ÷ $3,600,000 = 87.5%

Both are correct: GRR describes the durability of the whole base, renewal rate describes how the due renewals were handled.

How do I break renewal rate down by segment?

Segment	Accounts up	Logos renewed	Logo rate	ARR up	Gross dollar rate
Enterprise	20	19	95%	$1,600,000	92.5%
Mid-market	40	35	87.5%	$1,200,000	86.7%
SMB	60	48	80%	$800,000	78.8%
Total	120	102	85%	$3,600,000	87.5%

The totals reconcile: $1,480,000 + $1,040,000 + $630,000 = $3,150,000 renewed. SMB produces 12 of the 18 lost logos, which calls for a scaled, digital renewal motion. The single enterprise loss calls for an account-level review.

What rules keep the renewal rate honest?

Write these down before the first report:

• Define the cohort by contract end date, not signature date.
• Set a grace period, commonly 30 days, after which an unsigned renewal counts as churned.
• Leave accounts mid-way through a multi-year term out of the cohort. When they come up, count their annual value.
• Keep expansion out of the gross rate.
• Leave mid-term cancellations to churn and GRR, so no loss falls between reports.

Reporting rules

Four definitions to settle before you report

Clarivoxx analysis

Renewals signed earlyCount in the period of the original contract end dateCS operationsOwner assigned

Renewals still unsigned after the end date30-day grace period, then record as churnedCS operations and financeOwner assigned

Multi-year contracts mid-termExclude from the cohort until the term ends; count annual valueFinanceOwner assigned

Upsells signed with the renewalReport in net dollar renewal rate onlyAccount management leadOwner assigned

The guide to customer success metrics puts these definitions in one place.

What I've seen in practice

I learned to report both rates after a quarter where our logo rate looked fine and everyone was relaxed. Two of the accounts we lost were among our largest partners, and the dollar rate told a very different story. Now I always show both, side by side.

On one team I worked with, early renewals were counted in the quarter they were signed. One quarter looked great and the next looked weak, and nothing had changed except the calendar. That is why the cohort is defined by end date in my rules above.

My renewal rate dashboard

This quarter's column uses the 120-account cohort from the examples above.

Metric	Target	This quarter	Last quarter	Change
Logo renewal rate	90%	85%	82.5%	+2.5 pts
Gross dollar renewal rate	90%	87.5%	86.0%	+1.5 pts
Net dollar renewal rate	100%	95%	97%	−2 pts
SMB logo rate	85%	80%	78%	+2 pts
Enterprise gross dollar rate	95%	92.5%	96.0%	−3.5 pts
Quarterly GRR, whole base	97%	96.9%	96.4%	+0.5 pts

Net dollar rate fell while gross rose, so fewer losses came with slower expansion. In money terms the enterprise row matters most: a 3.5-point drop on $1.6M is $56,000 of ARR.

Frequently asked questions

What is a good renewal rate?

It depends on segment, contract size and term, and I have not found a public benchmark I trust enough to quote. Compare each quarter with the same quarter last year, by segment.

Should upsells count in the renewal rate?

Not in the gross rate. Include them in the net dollar rate so expansion is visible without hiding losses.

Is renewal rate the same as retention rate?

No. Renewal rate covers only contracts that came due in the period. Retention rates cover the whole customer base or all starting revenue.

How do you count early renewals?

In the period of the original contract end date, not the signature date. Otherwise one quarter looks strong and the next looks weak for no real reason.

Sources

• Churn rate, Wikipedia
• The Value of Keeping the Right Customers, Amy Gallo, Harvard Business Review (2014)