New Logos vs. Expansion: Weighting Commission the Right Way
In a land-and-expand motion, a small initial deal is supposed to grow into a much larger account over time. The comp plan question that trips up most companies is whether to pay reps more for landing the logo or for growing it, since those two skills don't always live in the same person.
This guide compares three ways companies weight new-logo and expansion commission, with the tradeoffs of each.
Vendors Covered in this Article
Disclosure: We may earn a commission if you buy through some links on this page. It doesn't change what we recommend.
Approach One: Pay New Logos Higher, Accept Thinner Expansion
Under this model, closing a brand-new account pays a noticeably higher commission rate than growing an existing one, often because new-logo deals involve a longer sales cycle, more stakeholders, and more competitive risk. The tradeoff is that once an account lands, the same rep (or a different account manager) has less financial reason to chase expansion revenue aggressively, since the per-dollar payout is lower.
This works best when your product genuinely needs land-and-expand, meaning the first deal is intentionally small and expansion is the real revenue driver, but you're comfortable having a separate customer success or account management function own the expansion motion instead of the original closer.
Approach Two: Pay Flat Across New and Expansion Revenue
A flat rate treats a dollar of expansion the same as a dollar of new business. This removes the incentive puzzle entirely and is simplest to explain to a new rep on day one. The tradeoff shows up later: reps naturally gravitate toward whichever motion is easier for them personally, and if expansion deals close faster with less effort than fresh logos, a flat rate can quietly starve your new-logo pipeline over a few quarters without anyone noticing until the funnel looks thin.
Approach Three: Tiered Rates That Shift With Account Maturity
This approach pays a premium on the first sale into an account, a mid-tier rate on expansion within the first year, and a lower rate on renewal-adjacent growth after that. It reflects the reality that expanding a brand-new relationship still takes real selling work, while expanding a five-year account is closer to account maintenance.
The tradeoff is complexity. A tiered structure needs a system that can track account age and apply the correct rate automatically, or your commission calculations become a manual, error-prone process every payout cycle.
How to Choose Between the Three
The right answer usually comes down to one question: does your expansion revenue require real sales skill, or is it closer to a renewal that customer success already influences? If expansion deals need discovery, a business case, and a champion the way a new-logo deal does, weight it closer to parity with new business. If expansion is mostly upsell triggered by usage data or a natural contract anniversary, a lower expansion rate reflects the lighter lift accurately without shortchanging the rep on the work they actually did.
Pick a weighting approach by checking these points:
- Whether expansion deals need discovery, a business case and a champion the way a new-logo deal does.
- Whether expansion is mostly upsell triggered by usage data or a renewal conversation that customer success already influences.
- Whether a separate customer success or account management team will own expansion after the first deal lands.
- Whether your team can handle a tiered structure, which adds complexity in return for tracking account maturity.
- Whether the CRM tags each deal as new logo or expansion so reps can see which rate applied.
Keeping the Plan Legible in Your CRM
Whichever approach you pick, reps need to see, deal by deal, which rate applied and why, or trust in the plan erodes fast. Pipedrive lets you tag deals by type, new logo versus expansion, so the commission math traces back to a visible field rather than a manager's memory of which bucket a deal belonged in. Rippling then handles the payout side, applying the calculated commission to payroll once the deal's tag and stage confirm it's closed.
A Worked Example
Say a rep closes a new logo worth a modest first-year contract, then grows that same account over the following year through two expansion deals. Under approach one, the new-logo commission check reflects the higher new-business rate, and the two expansion deals pay at the lower expansion rate, regardless of which rep actually worked them. Under approach three, the first expansion deal, since it lands within a year of the original sale, pays at a mid-tier rate, while a second expansion deal a year later drops to the lowest tier.
Walking one real account through the math this way, before the plan goes live, is the fastest way to catch a weighting scheme that looks reasonable on paper but pays out oddly in practice.
What Good Looks Like
A land-and-expand comp plan states explicitly, in writing, which of the three weighting approaches applies, defines what counts as new logo versus expansion in edge cases like lapsed accounts, and ties the rate to a visible deal field reps can check themselves.
Building The Capability (5-Stage Skill Ladder)
How to Get Started
Disclosure: We may earn a commission if you buy through some links on this page. It doesn't change what we recommend.
Frequently Asked Questions
What happens when a deal is technically an expansion but required a full new sales cycle?
This is common when a lapsed customer returns after a year of not buying. Define in the plan whether a lapsed-and-returned account counts as new logo or expansion, based on a specific time threshold like twelve months of no active contract, so reps aren't negotiating the classification deal by deal.
Should account managers and new-business reps be on the same plan?
Usually not. A new-business rep and an account manager have different jobs even when they touch the same account, so most companies run separate comp plans for each role rather than forcing one plan to reward two different skill sets fairly.
Does a land-and-expand motion always need a lower rate on expansion?
No. If your expansion deals are genuinely as hard to close as new business, for example selling a new product line into an existing account, pay them close to parity. The lower-rate approach only makes sense when the expansion work is genuinely lighter than the original sale.
About the numbers
This guide doesn't quote a sourced benchmark. Figures in it are estimates or general guidance, so check them against your own numbers.
Related Guides
The Land and Expand Motion: Starting Small on Purpose
Landing small only expands later if the first deal is built for it. Here is the sequence, from the first contract to the checkpoint that gets a buyer to expand.
Turning One Expansion Deal Into a Repeatable Case Study Asset
A worksheet for building an anonymized expansion case study that other account managers can actually reuse in their own land-and-expand conversations.
How to Commission Multi-Year Deals Without Overpaying Upfront
Three ways to pay commission on multi-year contracts, what each does to cash flow and rep incentives, and how to weight renewals so reps still chase them.
Rolling Out a New Commission Plan Without a Rep Revolt
How to communicate a comp plan change before it goes live, what the signed acknowledgment should actually confirm, and how to handle reps who push back.
Why a SaaS Commission Plan Doesn't Transfer to Fintech or Health Tech
How sales cycle length, deal complexity and regulatory review change what a competitive commission plan looks like across SaaS, fintech and health tech.
Designing a Commission Plan for Your First Sales Hire
Design a commission plan for your first sales hire: pick pay mix, quota, rate and ramp, test it with worked math and put it in writing before the start date.