Thread by @rayrike

Focusing on existing customer expansion ARR is a trending discussion topic in executive and board meetings around the globe

Below are some ideas and best practices to ensure "expansion ARR" is receiving the priority and focus required to convert talk into expansion ARR??? 👇

Some best practices from my conversations across the industry:

1️⃣ Establish customer expansion ARR (up-sells, cross-sells) as a line item quota component in compensation plans
- Total quota needs to be split into 2 quota elements: 1) New Customer ARR; 2) Existing Customer ARR

2️⃣ Introduce Customer Success Qualified Leads as an objective for every CSM - also allocate a portion of their incentive compensation to Expansion ARR booked

3️⃣ Allocate some Sales Development Representatives (SDRs) to existing customer expansion - especially when you have a multi-product portfolio

4️⃣ Establish "existing customer expansion" pipeline goals as a top 3 Marketing objective - measure and report weekly

Treat "existing customer expansion" like new customer ARR by measuring deal metrics including:
- Expansion opportunity avg cycle length (by segment & product)
- Expansion opportunity avg ACV
- Expansion opportunity stage-by-stage drop-off rates
- Expansion opportunity win rate

6️⃣ For multi-product portfolio companies introduce and measure product penetration ratio - the average number of products purchased by a customer and aggregated across all customers

7️⃣ Measure the time to up-sell/cross-sell for every new customer (by cohort) and establish time-based expansion targets accordingly (time to expansion)

8️⃣ Look at "product combination mix" at existing customers and introduce a "package or bundle" of the most common combinations and introduce to existing customers

9️⃣ Measure and publish Net Revenue Retention Rates (NRR) for customers with more than one product and communicate the results against single product customers regularly

🔟 All three GTM heads across Marketing, Sales, and Customer Success share measurable goals that everyone on their teams know are a priority:
- Customer Expansion ARR Goals vs actuals
- Customer Expansion ARR Pipeline Goals vs actuals
- Customer NRR (by cohort) goals vs actuals

What strategies and tactics are you using in 2023 to increase customer expansion ARR growth?? #nrr #ndr #b2bsaaS #upsells #crosssells