Expansion MRR Rate
Expansion MRR from existing customers as a percentage of total MRR, measuring the contribution of upsell and cross-sell to growth
What is Expansion MRR Rate?
Expansion monthly recurring revenue (MRR) rate is the additional recurring revenue from existing customers in a period, as a percentage of MRR at the start. It shows how much growth comes from customers spending more.
Expansion is one of the cheapest forms of growth for subscription businesses and can offset churn.
How this KPI is measured
- Function
- Sales
- Sub-function
- Product-Led Growth
- Industry
- Software / Technology (SaaS)
- Type
- Lagging
- Impact
- Revenue
- Unit
- %
- Measurement frequency
- Monthly
- Formula
- (Expansion MRR in period / Total MRR at start of period) × 100
How to calculate it
Divide expansion MRR in the period by total MRR at the start of the period, and multiply by 100.
For example, if MRR at the start was 200,000 and existing customers added 10,000 through upgrades and extra seats, the rate is 5%.
Expansion includes upgrades, add-ons and extra usage, and excludes new customers.
Where it is used
Measuring account growth
See how customers grow over time.
Offsetting churn
Check whether expansion outweighs losses.
Guiding customer success
Focus on upsell.
How to improve it
Tips and common mistakes
- Do not push upgrades that customers do not need. It raises churn.
- Read with churn and net revenue retention.
- Track by cohort.
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