Expansion Revenue

Expansion revenue is the additional revenue that comes from existing customers, for example through an upgrade to a higher plan, extra users, or additional features. It's the counterpart to "new business revenue" from new customers.

Expansion revenue is typically far more cost-effective than acquiring new customers: no CAC is needed, and existing customers have already built trust in the product.

Good customer service creates natural expansion moments: an agent who notices a customer hitting the limits of their plan can proactively suggest an upgrade at the moment the value is clearest.