What SaaS upselling looks like
One of the key drivers of SaaS growth should always be to upsell existing customers with new features/products and greater value-add. Blend, which just went public, illustrates this well in their S1. Their software drives transaction and loan volumes for banks, and they ended 2020 with $96mm of revenue, up from $51mm the year prior. A very large part of that growth was from upselling existing clients as they have net dollar retention of 162% and expanding cohorts. Their S1 provides detail on cohort expansion, and below we summarize it.
According to their S1, “to illustrate the economics of our customer relationships, we are providing an analysis of the revenue growth to date of the customers we acquired during 2018, which we refer to as the 2018 Cohort, and customers we acquired during 2019, which we refer to as the 2019 Cohort. To provide context, we have also included the customers we acquired in 2020. We selected the 2018 Cohort and 2019 Cohort to illustrate the potential long-term growth of our customer base. These customer cohorts reflect the success of our “land and expand” approach to growing customer relationships. Once we have acquired a new customer and completed our initial deployment, we are well positioned to introduce more products and marketplaces.”
The chart is a beautiful illustration of how Blend grows its revenue within its customer base. It’s “primarily attributable to growth in the volume of transactions with existing customers and cross-sell of additional products to those customers.” While winning new logos is great, Blend is an excellent example of how you should look internally for growth, by upselling your existing customer base.
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