Two ways to count it
Renewal rate is the percentage of customers or contract value that renews at term end, and whether you count logos or dollars changes the story. By logo, it asks how many customers stayed. By dollars, it asks how much revenue renewed. The two diverge whenever accounts are unequal in size, which they almost always are. A company can renew ninety percent of its customers and a lower share of its revenue if the accounts that left were large, so the basis has to be stated or the number misleads.Logo versus dollar renewal
| Logo renewal rate | Dollar renewal rate | |
|---|---|---|
| Counts | Number of customers | Contract value |
| Answers | How many stayed? | How much value stayed? |
| Hidden risk | Big accounts can churn unnoticed | Small-account churn looks minor |
Where it sits among retention metrics
Renewal rate is the renewal-event view of retention. It looks only at the accounts up for renewal in the period, which makes it sharper for renewal forecasting but narrower than base-wide measures. Gross revenue retention captures churn and contraction across the whole base, and net revenue retention adds expansion on top. Renewal rate feeds both and pairs naturally with logo retention rate for the customer-count angle and churn rate for the inverse. Read together, they separate whether a retention problem is about customers leaving, accounts shrinking, or a few big logos walking out the door.
Frequently Asked Questions
How is renewal rate calculated?
Renewal rate is the share of customers or contract value up for renewal in a period that actually renews. Logo renewal rate counts customers; dollar renewal rate counts revenue. A company can renew most of its logos while losing a few large accounts, so the dollar figure comes in lower. Reporting which basis you are using prevents a misleadingly rosy read.
What is the difference between renewal rate and retention rate?
Renewal rate measures only the accounts up for renewal in the period. Retention rate, especially gross and net revenue retention, measures the whole base over time and, in the net case, includes expansion. Renewal rate is the narrower, renewal-event view; retention rate is the broader base-health view.
What is a good renewal rate?
It depends on segment and contract length, but higher dollar renewal rates indicate a base that holds its value. A high logo renewal rate paired with a lower dollar renewal rate signals that small accounts renew while large ones churn or contract, which is a concentration risk worth watching even when the logo number looks strong.
Put these metrics to work
ORM builds custom revenue forecast models that turn concepts like renewal rate into prescriptive action for your team.
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