{
  "version": "1.13.0",
  "releasedAt": "2026-06-25",
  "kpi": {
    "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.",
      "authorityLevel": "self-declared-coalition"
    },
    "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"
    ],
    "calculationPolicy": {
      "inclusionRules": [
        "Numerator: S&M + Customer Success spend allocated to the expansion motion (upsell / cross-sell / land-and-expand).",
        "Denominator: expansion CARR generated in the period.",
        "CS comp is partly in scope: include the share of CSM cost attributable to expansion (typically the fraction of OTE tied to an expansion quota), per a documented rule."
      ],
      "exclusionRules": [
        "New-logo S&M spend from the numerator (goes in `sales.new_cac_ratio`).",
        "The retention-only share of CS comp — CSMs whose comp is purely tied to renewal/retention, not expansion.",
        "New-customer CARR and renewal CARR from the denominator."
      ],
      "requiredInputs": [
        "S&M + CS spend allocated to expansion.",
        "Expansion CARR for the period.",
        "The documented allocation rule for cross-functional (CS) comp."
      ],
      "dataSourcePriority": [
        "Financials + documented CS/S&M allocation model.",
        "CRM for expansion CARR."
      ],
      "edgeCases": [
        "CS team with no expansion quota at all: expansion is AE-driven; CS comp share is ~0 and the numerator is AE-expansion-comp only.",
        "Product-led expansion (self-serve upgrades, no human touch): the numerator may be near-zero — Expansion CAC Ratio approaches zero, which is correct and worth calling out as a strength.",
        "Allocation-rule change: re-state prior periods."
      ],
      "validationChecks": [
        "Expansion CAC Ratio should be materially lower than New CAC Ratio — healthy SaaS expansion is typically 3–5× cheaper per dollar (≈ 0.2–0.5 when New CAC Ratio ≈ 1.5).",
        "Expansion CAC Ratio ≥ New CAC Ratio is a red flag — the expansion motion is broken; investigate before reporting it as a number without commentary.",
        "Blended CAC Ratio must sit between New and Expansion CAC Ratio."
      ],
      "commonMiscomputations": [
        "Excluding CS comp entirely — understates the true cost of expansion, makes the motion look free.",
        "Including ALL of CS comp — overstates it; most CS comp is retention, not expansion. Use the documented allocation.",
        "Using ARR instead of CARR in the denominator.",
        "Reporting Expansion CAC Ratio in isolation — it is only meaningful next to New CAC Ratio (the comparison IS the insight)."
      ]
    },
    "metricBasis": {
      "timeBasis": "period_flow",
      "production": "computed"
    }
  }
}