mrr
What expansion grows.
expansion revenue
Expansion revenue is growth from existing customers — seat additions, tier upgrades, usage growth, cross-sell. Healthy SaaS targets 10-30% of new MRR coming from expansion (not new acquisition). Cleo on porchops watches for the signals; the founder decides which to act on.
In context.
Porchops splits revenue into three sources: new acquisition (Maggie's trial conversions), retention (Lou's recoveries + Cleo's renewals), and expansion (Cleo's signal-flagging).
Cleo watches four expansion signals: usage spikes (50%+ over rolling baseline, sustained 14 days), feature-adoption breadth, paying-team-size growth, and requested integrations. Each gets a flagged with rationale; founder decides whether to send a conversation note.
Concrete instances.
Customer's API call volume jumped from 8K/month to 14K/month over two weeks. Cleo flagged. Founder sent: "Saw your API volume — want to talk about Scale?" Customer upgraded.
Customer added 3 seats in a month (started at 5). Cleo flagged seat growth. Founder reached out about a volume discount conversation; customer added 2 more seats at the discount rate.
Customer asked in support about "do you integrate with Notion?" Cleo flagged the integration request. Founder added it to roadmap; followed up at ship; customer expanded plan.
Common questions.
What expansion target should I aim for?
10-30% of new MRR from expansion at our scale. Above 30% is excellent and usually means strong product-market fit. Below 10% suggests pricing or feature gaps that prevent existing customers from spending more.
How does expansion compare to acquisition?
Expansion is usually 3-5x cheaper per dollar of new MRR. Existing customers are easier to upsell than new customers are to acquire. Most $5K-$500K ARR SaaS under-invest in expansion relative to acquisition.
Does my pricing model affect expansion?
Significantly. Usage-based pricing has built-in expansion (more usage = more revenue). Flat-tier pricing requires explicit upgrades, which means signal-and-conversation. Hybrid models combine both. Cleo works with any pricing model.