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  "notes": "Discusses the impact of pricing changes on cohort behavior and defines the calculation steps for NRR.",
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      "text": "1. Gross New cohorts from May 2022 to April 2023 (red) are ignored from the calculation\n2. Instead, we're taking the $381 of \"Total Spend (Current)\" as of April 2023\n3. Then, dividing by the $316 of \"Total Spend (OG)\" of those same cohorts 12 months earlier\n4. Yielding an NRR of 121%",
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      "text": "A common case to consider is if you changed pricing or introduced annual contracts. Maybe your initial ACV is higher in more recent cohorts, which results in less relative expansion in the first ~3 months, but the lines converge by months 9-12 as the drop off from Month-to-Month (M2M) customers weighs down the legacy cohorts.",
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      "text": "The example below highlights the relevant cohorts used to calculate NRR in April 2023:",
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      "kind": "paragraph",
      "text": "Your business is constantly changing as an early-stage startup. You can think of Cohorts as your map to understand how experiments impact results.",
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      "kind": "paragraph",
      "text": "Almost every public SaaS company reports on NRR in public filings, but be mindful when comparing against peers—we cover why later in Benchmarking ARR.",
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      "text": "Following this methodology ensures the same customers are compared between the April 2023 and April 2022 periods. (See Figure 3.3.)",
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      "text": "This is the more commonly discussed of the two calculations. It compares the total spend of a fixed set of customers over a fixed window of time, typically 12 months, to show how much ARR is retained. It's important to note that the same set of customers are evaluated, meaning spending related to any Gross New customers acquired in the same fixed window (e.g., 12 months) is not included in the calculation.",
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