But in the first phases, new logo acquisition is valued by investors more. Why? There are three reasons.
Should you invest it on getting a new client or on expanding an current customer, if you have one advertising dollar to invest on your startup & rsquo; so expansion?
Mining the existing customer base for customer growth seems logical. Clients know your product and your staff, so increasing the account value should be easier.
S tougher route, spending that advertising buck on new customer acquisition is the better way.
Plus, the plan is successful in training. The PacCrest survey indicates upsell drives somewhere between 8-26percent of fresh bookings for SaaS companies, based upon the scale of the business. The larger the organization, the greater the percentage of fresh reservations from upsell.
Account expansion is also important. 120% adverse net expansion is typically achieved by best in class companies. However, in the early days, rsquo & maximizing account value shouldn;t be the attention.
Secondly, a customer base has a potential. $100k can be at paid by every customer, and if a business has 100 customers, the addressable revenue is $10M. Development is restricted. Won & rsquo even if all $10M can be efficiently acquired, with no the company customers & rsquo; s worth;t appreciate materially.
Third, in the end, distribution is the only permanent moat. A company which can’t achieve broad distribution to rsquo & products isn;t defensible. The competition that figures out distribution will finally win the biggest chunk of the market.
Acquiring new clients is one of the most difficult things to do. And it’s becoming tougher. Scalable new client acquisition suggests the company will keep growing at attractive rates. New customer purchase demands product marketplace match, a well run distinction and go-to-market function.