How To Calculate Net Annual Recurring Revenue in Zendesk Sell | Arithmix

Calculating net annual recurring revenue (NARR) is an important metric for any business that relies on recurring revenue. It helps you understand the true value of your customer base and provides insights into how to grow your business. In this article, we'll explain what NARR is, why it's valuable to calculate, and how to calculate it.

What Is Net Annual Recurring Revenue?

Net annual recurring revenue (NARR) is the total amount of recurring revenue a business generates from its customers in a year, after accounting for any discounts, refunds, or cancellations. Recurring revenue is revenue that a business receives on a regular basis, such as monthly or annually, from customers who have subscribed to a product or service. NARR is a key metric for subscription-based businesses, as it helps them understand the true value of their customer base.

To calculate NARR, you need to know the total amount of recurring revenue you generated in a year, as well as any discounts, refunds, or cancellations that occurred during that time. Once you have this information, you can subtract the total amount of discounts, refunds, and cancellations from the total amount of recurring revenue to get your NARR.

When Is It Valuable To Calculate Net Annual Recurring Revenue?

Calculating NARR is valuable for any business that relies on recurring revenue, but it's especially important for subscription-based businesses. By understanding your NARR, you can make informed decisions about how to grow your business and improve your customer retention.

For example, if your NARR is increasing over time, it means that you're adding more customers or increasing the amount of recurring revenue per customer. This is a good sign that your business is growing and that your customers are happy with your product or service. On the other hand, if your NARR is decreasing over time, it means that you're losing customers or that your customers are reducing the amount of recurring revenue they're paying. This is a warning sign that you need to take action to improve your customer retention.

Calculating NARR is also useful for forecasting your future revenue. By understanding your NARR, you can predict how much revenue you'll generate in the future and plan accordingly. This can help you make informed decisions about hiring, marketing, and other business expenses.

In conclusion, calculating NARR is an important metric for any business that relies on recurring revenue. By understanding your NARR, you can make informed decisions about how to grow your business and improve your customer retention. So, take the time to calculate your NARR and use it to guide your business decisions.

How Do You Calculate Net Annual Recurring Revenue in Zendesk Sell

Zendesk Sell itself isn’t naturally geared towards letting you calculate complex metrics like Net Annual Recurring Revenue. As an alternative, teams typically use products like Arithmix to import data from Zendesk Sell 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 Zendesk Sell, combine it with data from other systems, and create calculations like Net Annual Recurring Revenue.

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 Net Annual Recurring Revenue in Arithmix

Calculating metrics like Net Annual Recurring Revenue is simple in Arithmix. Once you've created your free account, you’ll be able to import your Zendesk Sell data, and use it to create natural language formulas for metrics like Net Annual Recurring Revenue.

Arithmix is designed to give you the power to build any calculations you want on top of your Zendesk Sell 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.