The numbers say yes: top quartile net retention for largely usage-based companies runs around 122 percent versus about 109 percent for those with none. But the switch is an organisation change, not a pricing page change. Your forecasting gets harder because revenue is no longer contracted, finance has to model consumption, product has to instrument the metered unit precisely, and sales compensation has to be redesigned around something that lands months after signature. Switch if there is an honest unit that tracks customer value. Do not switch to buy the expansion number, because a metric that customers cannot control produces bill shock and churn.
4 hand-picked resources, 1 India-specific, 4 link-checked. Pick how you want to dig in.
Why we picked it The net retention numbers by pricing model (122 percent top quartile for usage-based versus 109 percent without) plus the warning that switching is an org change, not a pricing page change.
From TechCrunch by Kyle Poyar 10 min read
Open techcrunch.com →Why we picked it The primary-source teardown behind the famous 158 percent net dollar retention, including the detail most people miss: it was above 200 percent a year earlier, and half of revenue growth came from existing customers expanding usage.
From Public Comps by Jon Ma 18 min read
Open blog.publiccomps.com →Why we picked it The cleanest definition of expansion MRR with the formula and the benchmark that matters: top companies get up to 40 percent of new ARR from existing customers.
From Chargebee 7 min read
Open chargebee.com →Why we picked it Accel's argument that expansion revenue is the specific thing that carries a company past $50M ARR, with the Twilio and Shopify revenue-mix numbers to show what it looks like when it works.
From SeedToScale by Accel by Vyushita Sahay 9 min read
Open seedtoscale.com →How expansion, upsell and churn reads from a different seat.
The same ground, over in Grow & market, our Starting Up track.
The same ground, over in Grow organically & retain, our D2C track.
