How To Calculate Gross Dollar Retention in Sageworks | Arithmix

Calculating gross dollar retention is an important metric for any business that wants to measure its ability to retain its customers and generate revenue. It is a simple calculation that can be done using a few key pieces of information about your business. In this article, we will explore what gross dollar retention is, when it is valuable to calculate it, and how to calculate it.

What Is Gross Dollar Retention?

Gross dollar retention is a measure of the amount of revenue that a business is able to retain from its existing customers over a given period of time. It is calculated by taking the total amount of revenue generated from existing customers at the beginning of a period and comparing it to the total amount of revenue generated from those same customers at the end of the period. This calculation gives you a percentage that represents the amount of revenue that was retained from those customers.

For example, if a business generated $100,000 in revenue from existing customers at the beginning of a year and $120,000 in revenue from those same customers at the end of the year, the gross dollar retention rate would be 120%.

When Is It Valuable To Calculate Gross Dollar Retention?

Gross dollar retention is a valuable metric for any business that wants to measure its ability to retain customers and generate revenue. It can be particularly useful for subscription-based businesses or businesses that rely heavily on repeat customers. By tracking gross dollar retention over time, businesses can identify trends and make adjustments to their strategies to improve customer retention and revenue generation.

For example, if a business notices a decline in gross dollar retention over a certain period of time, it may indicate that customers are not satisfied with the product or service and are leaving for competitors. This information can be used to make improvements to the product or service or to adjust pricing or marketing strategies to better retain customers.

How To Calculate Gross Dollar Retention

To calculate gross dollar retention, you will need to gather two pieces of information: the total amount of revenue generated from existing customers at the beginning of a period and the total amount of revenue generated from those same customers at the end of the period.

Once you have this information, you can use the following formula to calculate gross dollar retention:

Gross Dollar Retention = (Ending Revenue from Existing Customers / Beginning Revenue from Existing Customers) x 100%

For example, if a business generated $100,000 in revenue from existing customers at the beginning of a year and $120,000 in revenue from those same customers at the end of the year, the calculation would be:

Gross Dollar Retention = ($120,000 / $100,000) x 100% = 120%

By tracking gross dollar retention over time, businesses can identify trends and make adjustments to their strategies to improve customer retention and revenue generation.

In conclusion, gross dollar retention is an important metric for any business that wants to measure its ability to retain customers and generate revenue. By tracking gross dollar retention over time, businesses can identify trends and make adjustments to their strategies to improve customer retention and revenue generation. Calculating gross dollar retention is a simple process that can be done using a few key pieces of information about your business.

How Do You Calculate Gross Dollar Retention in Sageworks

Sageworks itself isn’t naturally geared towards letting you calculate complex metrics like Gross Dollar Retention. As an alternative, teams typically use products like Arithmix to import data from Sageworks and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Sageworks, combine it with data from other systems, and create calculations like Gross Dollar Retention.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Gross Dollar Retention in Arithmix

Calculating metrics like Gross Dollar Retention is simple in Arithmix. Once you've created your free account, you’ll be able to import your Sageworks data, and use it to create natural language formulas for metrics like Gross Dollar Retention.

Arithmix is designed to give you the power to build any calculations you want on top of your Sageworks data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.