NDR vs OTE
NDR (Net Dollar Retention) and OTE (On-Target Earnings) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: NDR refers to net dollar retention, while OTE refers to on-target earnings — they describe different things even when they show up in the same sentence.
NDR — Net Dollar Retention
Revenue retained from existing customers including upsells and downgrades, net of churn. NDR above 100% means the install base is growing on its own — the single best leading indicator of a healthy SaaS business.
OTE — On-Target Earnings
Total compensation a salesperson earns when they hit 100% of quota — base salary plus expected variable. OTE is the headline number in any sales offer and the anchor for capacity planning.
When to use NDR
Reach for "NDR" when the conversation is specifically about net dollar retention. Revenue retained from existing customers including upsells and downgrades, net of churn. NDR above 100% means the install base is growing on its own — the single best leading indicator of a healthy SaaS business.
When to use OTE
Reach for "OTE" when the conversation is specifically about on-target earnings. Total compensation a salesperson earns when they hit 100% of quota — base salary plus expected variable. OTE is the headline number in any sales offer and the anchor for capacity planning.
FAQs
What is the difference between NDR and OTE?
NDR stands for Net Dollar Retention — Revenue retained from existing customers including upsells and downgrades, net of churn. NDR above 100% means the install base is growing on its own — the single best leading indicator of a healthy SaaS business. OTE stands for On-Target Earnings — Total compensation a salesperson earns when they hit 100% of quota — base salary plus expected variable. OTE is the headline number in any sales offer and the anchor for capacity planning.
Are NDR and OTE the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. NDR = Net Dollar Retention. OTE = On-Target Earnings.
When should I use NDR vs OTE?
Use NDR when you're specifically referring to net dollar retention. Use OTE when the topic is on-target earnings.