Expansion MRR

What is Expansion MRR?

Expansion MRR 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 MRR 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 MRR can drive LTV and profitability.

How to calculate Expansion MRR

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

FAQs

Supported Integrations

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

Stripe

Online payment processing solution that supports e-commerce, subscriptions, and invoicing.

Recurly

Subscription management and billing platform.

Chargebee

Subscription billing and revenue management platform.

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