Why Parative

SaaS has a
growth problem.

SaaS companies have long lived by the mantra of new customers at all costs. But what happens when that stops working?

New customer acquisition is getting harder.

More Competition

More Competition

Rampant funding, more skilled workers, and a low barrier of entry means more companies than ever are fighting for the same finite pool of prospects.

Higher Costs

Higher Costs

Net new ARR is more expensive, takes longer to close, and takes longer to pay back. For many, reverting to free-to-use seems like the only solution to growth.

Unstable Markets

Unreliable Market

During a market downturn, teams freeze spending on new tools, instead prioritizing deeper investment in the tools that have already proven value.

If growth via acquisition alone is no longer viable, how can companies reliably hit their growth goals?

Expansion
is the untapped growth opportunity.

Percentage of Companies with ≥ 20% of New Annual Revenue from Expansion

19%

Only a minority of SaaS companies (less than 20%) attribute more than 20% of their annual revenue growth to expansion of current customers.

Percentage of Companies with ≥ 40% of YoY Revenue Increase From Existing Customers

14%

Even fewer (14%) see a notable YoY increase in revenue from their existing customers...

...despite the fact that expansion is easier, faster, and cheaper than new customer acquisition.

Net New ARR

$1.16

Avg. median cost to expand $1 of ACV

18

Avg. # of months to earn back expansion cost

5-20%

Success rate of expanding an existing customer

Expansion ARR

$0.24

Avg. median cost to expand $1 of ACV

3

Avg. # of months to earn back expansion cost

60-70%

Success rate of expanding an existing customer

The numbers don’t lie.
But today, only the most successful are giving enough attention to expansion.

Expand to win.

Not only is expansion cost effective. Research also shows that the most successful companies focus the most on growth via expansion revenue.

There is a direct correlation between a company’s growth rate and its percentage of new annual revenue from expansion.

Even better, expanded customers are churn, recession, and competition resistant.

Percentage of companies with >40% revenue growth from expansion

Current customers are the lowest hanging fruit for revenue growth.

40%

Avg. % of revenue from expansion for hyper-growth companies.

7x

Cheaper to retain customers
than attract new.

5x

Cheaper to expand NRR vs
acquire new ARR.

Companies need to operationalize their expansion efforts.

Parative empowering the tools you already use with conditions