Expansion MRR Rate measures the additional recurring revenue generated from existing customers through upsells, cross-sells, or increased usage. It is a subset of MRR that specifically highlights the effectiveness of your 'Land and Expand' strategy. Expansion is significantly more efficient than new customer acquisition because the cost of selling to someone who already uses and trusts your product is a fraction of the CAC for a new lead. To calculate the rate, you divide the new revenue from existing users by the total starting MRR of that period. A high expansion rate is a sign of a 'sticky' product with a pricing model that scales alongside the customer’s success. It is the primary engine behind achieving NRR scores above 100%. Product teams often drive expansion by creating 'Add-on' features or seat-based tiers that naturally encourage accounts to grow as their own teams expand.