Insight from Appcues
We’ve talked about spending money, let’s dig into making more of it.
I don’t know about you, but I’m all about spending the least amount of money for the biggest payoff.
That’s why I love expansion revenue.
It’s all about generating more income from customers you already have. Think upsells, cross-sells, and add ons.
It’s actually 4x cheaper to do this than to acquire a new customer. I’d rather sell existing customers new value-adds than hustle for new business any day.
So let’s crunch some numbers.
The quick math: add up revenue from upsells, cross-sells, and add ons at the beginning of the month. Do the same at the end of the month.
Subtract the end-of-the-month number from the start-of-the-month number. That’s your Expansion MRR (monthly recurring revenue).
Expansion MRR = end of month expansion revenue – start of month expansion revenue
To find out if that number’s good, do this calculation to find your percentage:
Finmark says most Saas businesses consider 10-30% as good.
Where are you at?
Learn more: 30%+ of your revenue should be expansion revenue