How To Calculate Net Revenue Retention in HubSpot Sales Hub | Arithmix
Learn how to calculate net revenue retention in HubSpot Sales Hub with our comprehensive guide. Discover the key metrics and formulas needed to accurately measure your business's revenue growth and retention rates. Improve your understanding of HubSpot Sales Hub's financial performance and make informed decisions for your company's future success.
Calculating net revenue retention is an important metric for any business. It helps you understand how much revenue you are retaining from your existing customers over a given period of time. This is a valuable metric because it can help you identify areas where you can improve your customer retention and increase your revenue. In this article, we will explore what net revenue retention is, when it is valuable to calculate it, and how to calculate it.
What Is Net Revenue Retention?
Net revenue retention is a metric that measures the revenue you retain from your existing customers over a given period of time. It takes into account the revenue you earn from your existing customers at the beginning of the period, as well as any additional revenue you earn from those customers during the period. It also takes into account any revenue you lose from those customers during the period.
Net revenue retention is calculated by dividing the total revenue you earn from your existing customers during the period by the total revenue you earned from those same customers at the beginning of the period. This gives you a percentage that represents how much revenue you retained from your existing customers during the period.
When Is It Valuable To Calculate Net Revenue Retention?
Net revenue retention is a valuable metric to calculate for any business that relies on recurring revenue from its customers. This includes businesses that offer subscription-based services or products, as well as businesses that have a high rate of repeat customers.
By calculating net revenue retention, you can identify areas where you may be losing revenue from your existing customers. This can help you make changes to your business model or customer retention strategies to improve your revenue retention and increase your overall revenue.
How to Calculate Net Revenue Retention
To calculate net revenue retention, you will need to gather data on your revenue from your existing customers over a given period of time. This can be done using your accounting software or customer relationship management (CRM) software.
Once you have this data, you can calculate net revenue retention using the following formula:
Net Revenue Retention = (Total Revenue from Existing Customers During Period / Total Revenue from Existing Customers at Beginning of Period) x 100
For example, if you earned $100,000 from your existing customers at the beginning of the period and earned an additional $20,000 from those customers during the period, but lost $5,000 in revenue from those customers, your net revenue retention would be:
Net Revenue Retention = (($100,000 + $20,000 - $5,000) / $100,000) x 100 = 115%
This means that you retained 115% of your revenue from your existing customers during the period, which is a positive sign for your business.
Overall, net revenue retention is an important metric for any business that relies on recurring revenue from its customers. By understanding how to calculate net revenue retention and when it is valuable to do so, you can make informed decisions about your business and improve your revenue retention over time.
How Do You Calculate Net Revenue Retention in HubSpot Sales Hub
HubSpot Sales Hub itself isn't naturally geared towards letting you calculate complex metrics like Net Revenue Retention. As an alternative, teams typically use products like Arithmix to import data from HubSpot Sales Hub and build out dashboards.
What is Arithmix?
Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers you'll powerful yet easy to use. With Arithmix you can import data from systems like HubSpot Sales Hub, combine it with data from other systems, and create calculations like Net Revenue 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 Revenue Retention in Arithmix
Calculating metrics like Net Revenue Retention is simple in Arithmix. Once you've created your free account, you'll be able to import your HubSpot Sales Hub data, and use it to create natural language formulas for metrics like Net Revenue Retention.
Arithmix is designed to give you the power to build any calculations you want on top of your HubSpot Sales Hub 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