Short answer: Next year’s growth comes from four places: keeping the revenue you have, expanding existing customers, winning new logos and capturing more value through price. Most annual plans load the gap onto new logos because that’s the number sales owns. A revenue bridge that weighs all four sources usually finds cheaper, faster growth in retention and pricing.
Ask a leadership team where next year’s growth will come from and most will point to the sales team. New logos are visible, measurable and easy to assign. They’re also the most expensive growth available, with the longest lead time.
A revenue bridge forces a different conversation.
A revenue bridge shows, source by source, how the business gets from this year’s revenue to next year’s target. It starts with current ARR, subtracts expected churn and contraction, then adds expansion, new logo bookings and price changes until it reaches the target.
It’s the CFO’s view of the plan, and it’s the clearest way to see whether the plan depends too heavily on any one source.
Using the same example as Which Number Is the Real Number?: you finish the year at $100M ARR and the board wants $130M.
| Source | What it means | Example value |
|---|---|---|
| Retention | Revenue you keep from existing customers | Lose 10%, so $10M must be replaced |
| Expansion | Upsell and cross-sell to existing customers | 12% of base, or $12M |
| Price | Higher realized price on new and renewing business | 3% on the $90M that renews, or about $2.7M |
| New logos | Revenue from new customers | Whatever is left |
In the original plan, without pricing, new logos had to deliver $28M. Add a 3% price increase on renewing revenue and the new logo requirement drops to about $25.3M. At a $70K average contract value, that’s roughly 39 fewer new customers to win.
That’s the core point. A small change in retention or price often moves more revenue than a large change in new logo activity, and it costs less to deliver.
Three reasons come up repeatedly:
Retention sets the floor for everything else. Every point of gross churn is revenue the commercial team has to replace before it grows.
SBI benchmarks top-quartile gross revenue retention for $100M to $500M software companies at 85% to 95%. If your business sits at 85% and the plan assumes 90%, that five-point improvement is worth $5M on a $100M base. It needs a funded plan behind it, such as earlier risk signals, better onboarding or a renewal process that starts sooner.
Net revenue retention combines retention and expansion. In the example, 90% gross retention plus 12% expansion gives 102% net revenue retention. Every point above 100% is growth the business earns before signing a single new customer.
Pricing is the most under-used lever in most annual plans because it feels risky. In practice, a planned, well-communicated price increase on renewing customers, combined with tighter discount control on new deals, can add several points of growth.
The planning questions are: What was average price realization last year? How much discount did sales give away? When was the last price increase, and what happened to retention afterward? SBI’s guidance on running a successful price increase is a good starting point.
Build the bridge four ways before you commit to one:
For each version, compare the cost, the time to impact and the confidence level. The balanced version is usually less risky, because it doesn’t depend on any single team overperforming.
Pull last year’s revenue movement: starting ARR, churn, contraction, expansion, new logos and price changes. See which sources actually drove growth. Then ask whether next year’s plan reflects that mix, or whether it simply asks new logos to cover the gap.
For the full planning approach, visit the SBI Annual Planning Hub.