This tool measures revenue growth from your existing customers through upsells and cross-sells, providing a clear picture of how well you are expanding within your current user base.
Expansion MRR Rate:
5%
With a starting MRR of $10000 and expansion revenue of $500, your expansion rate is 5%.
A higher rate indicates strong product-market fit and effective upselling, as your existing customers are choosing to invest more in your solution.
The Expansion MRR Rate is a metric of organic growth that tracks the additional recurring revenue generated from your current user base over a specific period. It focuses exclusively on your existing customers, highlighting the success of upselling and cross-selling efforts.
Expansion MRR Rate = (Expansion MRR / Starting MRR) × 100
Imagine your company begins the month with a Starting MRR of $100,000. During that month, you successfully upgrade several clients and sell additional features, resulting in an Expansion MRR of $8,000.
For most SaaS businesses, 2-5% is considered a healthy target for a monthly Expansion MRR rate, signaling strong product-market fit within the existing client base.
What counts as Expansion MRR?Expansion MRR includes revenue from plan upgrades (upsells), feature add-ons, and additional seat expansions within existing customer accounts.
Does this include new customers?No, revenue from first-time customers is tracked separately as New Business MRR.
Why is this metric important?It is a critical indicator of customer satisfaction and product value; it proves that your existing customers are willing to spend more because they find your product essential to their operations.
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