What is Dollar-Based Net Expansion Rate?
Dollar-based net expansion rate (DBNER) measures revenue growth from existing customers over a specific period, accounting for upgrades, downgrades, and churn.
Example of Dollar-Based Net Expansion Rate
A company with $1 million in revenue from existing customers in the previous year and $1.2 million in the current year has a DBNER of 120%.
How To Calculate Dollar-Based Net Expansion Rate
(DBNER = (Current Period Revenue – Previous Period Revenue) / Previous Period Revenue) x 100
- Special Tip: Focus on customer retention and upselling to improve your DBNER and overall revenue growth.
- Advantages
- Provides insight into customer retention and revenue growth.
- Helps identify opportunities for upselling and cross-selling.
- Disadvantages
- Can be affected by significant churn or downgrades.
- Requires accurate revenue tracking.
FAQs
Why is DBNER important?
It shows how effectively a company is growing revenue from its existing customer base.
What is a good DBNER?
A DBNER above 100% indicates positive revenue growth from existing customers.
How can I improve my DBNER?
Focus on customer satisfaction, upselling, and minimizing churn.
Is DBNER relevant for all businesses?
It is particularly useful for subscription-based and SaaS companies.
