Net Dollar Retention Rate

Tom Tonguz covers the SaaS industry a lot and came out with this article that I found interesting.

He brings up how companies measure this KPI differently and how you measure it can potentially impact what that final figure looks like. He brings up Twilio for example:

Twilio calculates it as the annual change in cohort quarterly recurring revenue.

This is different than Zendesk:

Zendesk reports the annual change in cohort monthly recurring revenue.

Just something to be mindful of when we talk about Net Dollar Retention Rates for different companies since they all measure it in some way but may result in slightly different results.

I don’t think there is an industry standard yet but I think there should be.