Apply / Commission Structures / Renewal & Retention
Expansion Commission
Commission paid on net-new ARR added to existing customers.
Renewal & Retention
Intermediate
How it works
A separate rate for expansion: net-new ARR added to an existing customer (upsell, cross-sell, seat expansion). Expansion is the single most-watched growth metric in SaaS - net retention drives valuation - and the comp plan should make expansion economically attractive to whichever role owns it (AE or CSM).
Formula
Commission_expansion = rate_expansion x net_new_ARR
Worked example
Example. Rate card: New 10%, Expansion 8%. A CSM expands an existing customer by $50K ARR earning $4K commission.
Pros & cons
Pros
- Aligns rep effort with NRR / expansion strategy
- Critical for SaaS unit economics
- Drives focus on customer growth
Cons
- Rep behavior may favor easier upsells over hard new logos
- Requires clear rules of engagement (AE vs. CSM)
Best for
- All SaaS roles touching existing accounts
- CSMs with expansion quotas
- Account-management organizations