Upsell and cross-sell commission (also called expansion commission) is compensation for salespeople or account managers for increasing revenue from existing customers. It's a central part of the "land and expand" strategy, where the initial sale is the starting point for further growth.
Upsell: Customer upgrades to a more expensive version of the same product (e.g., from Basic to Enterprise plan).
Cross-sell: Customer buys another product or module in addition to existing ones (e.g., adds analytics module to CRM).
Expansion revenue is often more profitable than new sales:
Upsell and cross-sell treated as new business:
| Type | Rate |
|---|---|
| New sale | 10% |
| Upsell | 10% |
| Cross-sell | 10% |
Advantage: Simple, strong incentive
| Type | Rate |
|---|---|
| New sale | 10% |
| Upsell | 6% |
| Cross-sell | 8% |
Rationale: Lower sales effort required.
| Who Closes | Type | Rate |
|---|---|---|
| Original AE | Upsell | 8% |
| AM/CSM | Upsell | 5% |
| New AE | Cross-sell (new product) | 10% |
| Element | Value |
|---|---|
| Current ACV | $30,000 |
| New ACV after upsell | $52,500 |
| Upsell value (delta) | $22,500 |
| Upsell commission (8%) | $1,800 |
| Element | Value |
|---|---|
| Existing product (CRM) | $45,000/year |
| New module (Analytics) | $15,000/year |
| Cross-sell commission (10%) | $1,500 |
| Element | Value | Rate | Commission |
|---|---|---|---|
| Base renewal | $60,000 | 3% | $1,800 |
| Upsell (more licenses) | $15,000 | 8% | $1,200 |
| Cross-sell (new module) | $11,250 | 10% | $1,125 |
| Total | $86,250 | - | $4,125 |
Most common for existing customer relationships:
The rep who closed the first sale:
Dedicated expansion salesperson for larger upsells:
| Role | Share of Expansion Commission |
|---|---|
| CSM (identifies opportunity) | 30% |
| AE (closes deal) | 70% |
Expansion contributes to NRR above 100%:
| Metric | Value |
|---|---|
| Starting MRR (customers from 12 months ago) | $150,000 |
| Churn | -$12,000 |
| Downgrade | -$3,000 |
| Upsell | +$22,500 |
| Cross-sell | +$7,500 |
| Current MRR | $165,000 |
| NRR | 110% |
Many organizations set separate quotas for expansion:
Upsell and cross-sell commission is essential for companies that want to maximize the value of their customer base. By incentivizing the right people to identify and close expansion opportunities, you can increase NRR and accelerate growth.
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