Net New Revenue

Revenue generated from customers who have never purchased from your company before, often used to evaluate partner program impact or performance bonuses.
Explanation:

Net New Revenue refers to the revenue generated from customers who have never previously purchased from your company. It captures the true growth driven by acquiring brand-new customers, either directly or through partners, and is often used as a key metric for evaluating partner program impact, setting performance bonuses, and assessing the effectiveness of sales and marketing strategies.

The term is used two ways. In sales and partner programs, net new revenue usually means revenue from first-time customers only. In SaaS finance, "net new ARR" or "net new MRR" is a broader figure that also adds expansion revenue and subtracts churn and contraction.

How to calculate net new revenue:

  • Sales and partner programs: Net new revenue equals revenue from first-time customers in the period.
  • SaaS finance: Net new ARR equals new business ARR, plus expansion ARR, minus contraction ARR, minus churned ARR.

Key components of Net New Revenue often include:

  • First-Time Customer Purchases: Revenue recognized from initial deals closed with accounts that have no previous purchase history with your company.
  • Partner Attribution: Tracking which partners contributed to sourcing or closing net new customers, allowing for transparent performance evaluation and reward distribution.
  • Segmentation from Expansion Revenue: Net new revenue is measured separately from upsells, cross-sells, or renewals to provide a clear view of new logo acquisition.
  • Bonus and Incentive Tie-Ins: Many partner programs and sales teams structure bonuses or MDF eligibility based on net new revenue contributions to encourage growth-focused activities.
  • Growth Tracking: An important KPI for assessing the scalability and market expansion success of both direct and partner-led go-to-market efforts.

Net new revenue is not the same as net revenue retention (NRR). NRR measures how much recurring revenue you keep and grow from existing customers over a period, after expansion, contraction, and churn. Net new revenue looks at revenue from new customers or, in the finance version, the net change in recurring revenue. A company can win many new customers and still have weak NRR if existing customers leave or shrink.

Net New Revenue is vital in partner programs, direct sales strategies, and go-to-market planning for SaaS, B2B tech, and service industries. It highlights how effectively a business or its ecosystem is bringing fresh customers into the fold, essential for sustaining long-term growth.

What counts as net new revenue in a partner program?

Revenue from deals with customers who are new to your company, where a partner sourced or influenced the deal. Renewals, upsells, and expansion with existing customers are tracked separately.

Is net new revenue the same as partner-sourced revenue?

No. Net new revenue asks whether the customer is new. Partner-sourced revenue asks who originated the deal. A partner can source an expansion deal with an existing customer, and your own sales team can win a new customer without any partner involved. See partner-sourced revenue.

Why track net new revenue separately from expansion revenue?

New-customer revenue shows how well you are reaching new markets, while expansion revenue shows how well your product grows inside existing accounts. Blending them hides which one is driving growth.

Kiflo ties partner-sourced and partner-influenced revenue to the deal, so partnerships can show which closed deals partners helped win, including deals with new customers. See Kiflo's revenue tracking, and how partner-sourced revenue differs from partner-influenced revenue.

Example:
Their quarterly SPIFF focused on driving net new revenue from technology clients.

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