How do I spot which accounts are actually ready to expand?

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.

Expansion MRR: Definition, Formula, and Impact on SaaS Growth

From Chargebee 7 min read

• Established subscription businesses run 10 to 30 percent annual expansion rates.
• Some companies get up to 40 percent of their new ARR from existing customers rather than new logos.
• Expansion MRR rate = (end-of-month expansion MRR minus start) divided by start, times 100.

The most complete breakdown of what goes into a health score: which four to six categories to weight, how to segment scores by journey stage, and the failure modes (too many metrics, too much subjective input).

Customer Health Score Explained: Metrics, Models and Tools

From Gainsight 12 min read

• Sample health score weighting: usage 40 percent, support trends 25 percent, sentiment 20 percent, executive engagement 15 percent.
• Score bands used to triage accounts: 71 to 100 healthy, 31 to 70 at risk, 0 to 30 critical.
• 78 percent of customers say personalisation makes them more likely to buy again (McKinsey, 2021).

The Gainsight CEO on why CS should own an NDR number rather than just a churn number, including the idea of giving every CSM their own book of MRR to grow from 100 to 115.

8 Things I Learned from Dave Kellogg About Net Dollar Retention

From Gainsight by Nick Mehta 8 min read

• Gross retention is ambiguous (which ARR is the denominator, is a product swap churn), while NDR folds churn and expansion into one number.
• One cloud company cut NDR by acquisition channel (self-service, enterprise, channel) and found some sales motions were losing money.
• Some accounts churn whatever a CSM does, so that time is better spent expanding healthy customers.
• Break upsell into its parts: more of the same product, new products to the same buyer, new products to new buyers.

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.

Usage-based pricing is a company-wide effort

From TechCrunch by Kyle Poyar 10 min read

• Top-quartile net retention was 122 percent with largely usage-based pricing, versus 110 percent for usage tiers and 109 percent for none.
• About 85 percent of Twilio's net expansion comes from more usage, only 15 percent from new products.
• Usage-based companies spend more on R&D than on sales: median ratio 1.5x, against 0.8x for companies without usage pricing.
• Usage pricing shows up most where gross margins are thin (median 72 percent, bottom quartile 51 percent or lower).

Retool's revenue lead on the signals that mark an account as ready, and how she profiles past expansions to build the list. Concrete about usage thresholds and second teams showing up, which is exactly what this question asks you to look for.

How to Scale Revenue With a "Land & Expand" Model (Eleanor Dorfman, ReTool)

On 30 Minutes to President’s Club by Eleanor Dorfman 30 min