How To Calculate Net Dollar Retention in BQE CORE | Arithmix
Learn how to calculate Net Dollar Retention in BQE CORE with our step-by-step guide. Understand the importance of this metric and how it can help you track your business's growth and success. Start optimizing your financial strategy today.
Calculating net dollar retention is an important metric for any business looking to measure the success of their customer retention efforts. It provides insight into how much revenue a company is retaining from existing customers, as opposed to relying solely on new customer acquisition. In this article, we will explore what net dollar retention is, when it is valuable to calculate, and how to calculate it in BQE CORE.
What Is Net Dollar Retention?
Net dollar retention is a metric that measures the amount of revenue a company retains from existing customers over a given period of time. It takes into account both upsells and churn, and is calculated by dividing the revenue from existing customers at the end of a period by the revenue from those same customers at the beginning of the period. The result is expressed as a percentage, with a higher percentage indicating better customer retention.
For example, if a company has $100,000 in revenue from existing customers at the beginning of a quarter, and $120,000 at the end of the quarter, their net dollar retention rate would be 120%. This means that they retained 120% of the revenue from their existing customers over the quarter, after accounting for any churn or lost revenue.
When Is It Valuable To Calculate Net Dollar Retention?
Calculating net dollar retention is valuable for any business that relies on recurring revenue from existing customers. It provides insight into the effectiveness of customer retention efforts, and can help identify areas for improvement. A high net dollar retention rate indicates that a company is doing a good job of retaining existing customers and generating additional revenue from them through upsells or cross-sells.
Additionally, net dollar retention can be used to forecast future revenue. By analyzing trends in net dollar retention over time, a company can make informed predictions about future revenue growth or decline.
How to Calculate Net Dollar Retention in BQE CORE
To calculate net dollar retention in BQE CORE, you will need to gather data on revenue from existing customers at the beginning and end of a given period. This data can be found in the financial reports section of the software.
Once you have the revenue data, you can use the following formula to calculate net dollar retention:
(Revenue from existing customers at end of period - Revenue lost from existing customers during period) / Revenue from existing customers at beginning of period x 100
For example, if a company had $100,000 in revenue from existing customers at the beginning of a quarter, lost $10,000 in revenue from churn or lost customers, and had $120,000 in revenue from existing customers at the end of the quarter, their net dollar retention rate would be:
($120,000 - $10,000) / $100,000 x 100 = 110%
This means that they retained 110% of the revenue from their existing customers over the quarter, after accounting for any churn or lost revenue.
Overall, calculating net dollar retention is a valuable metric for any business looking to measure the success of their customer retention efforts. By understanding what net dollar retention is, when it is valuable to calculate, and how to calculate it in BQE CORE, you can gain valuable insights into the health of your business and make informed decisions about future growth and strategy.
How Do You Calculate Net Dollar Retention in BQE CORE
BQE CORE itself isn’t naturally geared towards letting you calculate complex metrics like Net Dollar Retention. As an alternative, teams typically use products like Arithmix to import data from BQE CORE 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 BQE CORE, combine it with data from other systems, and create calculations like Net 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 Net Dollar Retention in Arithmix
Calculating metrics like Net Dollar Retention is simple in Arithmix. Once you've created your free account, you’ll be able to import your BQE CORE data, and use it to create natural language formulas for metrics like Net Dollar Retention.
Arithmix is designed to give you the power to build any calculations you want on top of your BQE CORE 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.Use Arithmix free