← View All Metrics
Read about our privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Expansion

Finance

What is Expansion?

Expansion reflects the additional Monthly Recurring Revenue (MRR) generated from existing customers through upsells, cross-sells, and upgrades.

How is Expansion used?

This metric gauges your ability to grow revenue within your current customer base without relying on new customers. It's useful as a gauge for customer health, as when customers spend more on a product or service they are generally satisfied. Expansion Growth is viewed more favourably than New MRR growth. This is because it signals you can grow without adding new customers and an increase in Expansion can drive LTV and profitability.

How to calculate Expansion

Average Expansion MRR x Expanding Customers

To calculate Expansion, multiply the Average Expansion Monthly Recurring Revenue (MRR) by the number of Expanding Customers.

Best Practices

To increase Expansion MRR, focus on driving up-sells and cross-sells; use customer data to make personalised upgrade recommendations that align with their interests and needs. Experiment with tiered pricing models to maximise value extraction from customers.

Common Misconceptions

Avoid calculating the overall revenue impact and exclude revenue lost due to Contraction and Churn to isolate the impact of Expansion. Measuring overall revenue impact can result in underestimating Expansion due to high Contraction or Churn.

/

/

FAQs

What are the main drivers of Expansion?
  • Up-sell effectiveness
  • Cross-sell effectiveness
How should I break down Expansion?
  • Industry vertical
  • Geography
  • Company size
  • Product
  • Acquisition channel
  • Acquisition source/medium
  • Usage patterns

Supported Integrations

Get this metric directly out of one of our supported integrations.

Related Metrics

Join other fast growing startups using Calliper.

Calliper is a modern business intelligence platform designed for SaaS Operators. Get automatic customer insights and alerts, and make data-informed decisions with ease.