{
  "rogueId": "sales.expansion_cac_ratio",
  "slug": "expansion_cac_ratio",
  "domain": "sales",
  "defaultLabel": "Expansion CAC Ratio",
  "description": "Fully-loaded S&M plus Customer Success expense attributable to expansion divided by expansion CARR generated in the period. Per SMSB, the efficiency read on the upsell / cross-sell / land-and-expand motion. Distinct from the new-logo CAC ratio because the cost base often includes CSMs whose primary metric is retention but whose secondary metric is expansion — boards expect to see that allocation called out. Common pitfall: excluding CS comp entirely understates the true cost of expansion; including all of CS overstates it. The SMSB standard prescribes a documented allocation rule (typically tied to expansion-quota OTE share).",
  "fieldType": "number",
  "unit": null,
  "maturity": "general",
  "suggestedForStages": [
    "seriesA",
    "seriesB",
    "seriesC",
    "public"
  ],
  "defaultOwningFunctions": [
    "Sales",
    "Finance"
  ],
  "stageRelevance": {
    "seriesA": "recommended",
    "seriesB": "recommended",
    "seriesC": "recommended",
    "public": "recommended"
  },
  "definitionSource": {
    "tier": "published",
    "sourceName": "SaaS Metrics Standards Board",
    "sourceUrl": "https://www.saasmetricsboard.com/expansion-cac-ratio",
    "sectionRef": "Expansion CAC Ratio",
    "publicationDate": "2023-01-01",
    "attributionNotice": "Metric definitions reference standards published by the SaaS Metrics Standards Board (saasmetricsboard.com). imboard is not affiliated with, endorsed by, or a member of SMSB."
  },
  "formula": "Expansion CAC Ratio = (S&M + CS spend allocated to expansion in period) / (Expansion CARR generated in period). Per SMSB §Expansion CAC Ratio: allocation rule for cross-functional comp (typically split by quota share of OTE) must be documented and consistent.",
  "whyItMatters": "Validates the financial logic of \"expansion is cheaper than acquisition\" — when this is healthy, the company should bias growth investment toward post-sale; when it inverts (Expansion CAC ≥ New CAC), the expansion motion is broken and acquisition is the only available lever.",
  "interpretationGuidance": "Per SMSB convention, healthy Expansion CAC Ratio is typically 3–5× cheaper than New CAC Ratio — i.e. 0.2–0.5 when New CAC Ratio is ~1.5. Expansion CAC Ratio > 1.0 is a yellow flag (expansion costs as much as it earns); inversion vs New CAC Ratio is a red flag warranting a CS / sales-team org review.",
  "relatedKpiIds": [
    "sales.blended_cac_ratio",
    "sales.new_cac_ratio",
    "sales.expansion",
    "customers.net_revenue_retention",
    "sales.carr"
  ]
}