# How To Calculate Net Dollar Retention in Method CRM | Arithmix

Learn how to calculate net dollar retention in Method CRM with our comprehensive guide. Increase your revenue and improve customer retention by mastering this essential metric.

Net Dollar Retention is an important metric that helps businesses understand how much revenue they are retaining from their existing customers. It is a measure of the revenue generated from the same set of customers over a period of time, usually a year. In this article, we will discuss how to calculate Net Dollar Retention in Method CRM and why it is valuable for businesses to track this metric.

## What Is Net Dollar Retention?

Net Dollar Retention is a metric that measures the revenue generated from existing customers over a period of time. It takes into account the revenue lost due to churn (customers who stopped doing business with the company) and the revenue gained from expansion (customers who increased their spending with the company).

The formula for calculating Net Dollar Retention is:

Net Dollar Retention = (Revenue from Existing Customers at the End of the Period - Revenue Lost from Churned Customers) / Revenue from Existing Customers at the Beginning of the Period

For example, if a company had \$1 million in revenue from existing customers at the beginning of the year, and lost \$100,000 due to churn, but gained \$200,000 from expansion, the Net Dollar Retention would be:

Net Dollar Retention = (\$1,100,000 - \$100,000) / \$1,000,000 = 1.1 or 110%

This means that the company retained 110% of the revenue from its existing customers over the year, which is a positive sign for the business.

## When Is It Valuable To Calculate Net Dollar Retention?

Net Dollar Retention is valuable for businesses in several ways. Firstly, it helps businesses understand how much revenue they are retaining from their existing customers, which is a key indicator of customer loyalty and satisfaction. If a company has a high Net Dollar Retention rate, it means that its customers are happy with its products or services and are likely to continue doing business with the company in the future.

Secondly, Net Dollar Retention can help businesses identify areas for improvement. If a company has a low Net Dollar Retention rate, it may be an indication that its customers are not satisfied with its products or services, or that it is not doing enough to retain them. By analyzing the reasons for churn and identifying opportunities for expansion, businesses can take steps to improve their Net Dollar Retention rate and increase their revenue from existing customers.

Finally, Net Dollar Retention can help businesses make better decisions about their marketing and sales strategies. By understanding which customers are most valuable and which products or services are most profitable, businesses can focus their efforts on retaining those customers and promoting those products or services. This can lead to increased revenue and profitability over time.

In conclusion, Net Dollar Retention is an important metric that businesses should track in order to understand how much revenue they are retaining from their existing customers. By calculating Net Dollar Retention in Method CRM, businesses can gain valuable insights into customer loyalty and satisfaction, identify areas for improvement, and make better decisions about their marketing and sales strategies.

## How Do You Calculate Net Dollar Retention in Method CRM

Method CRM 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 Method CRM 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 Method CRM, 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.