Are upsells considered net new revenue?

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ChrisAbout
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Are upsells considered net new revenue?

Post by ChrisAbout » Tue May 02, 2017 2:50 pm

I work in the sales industry and sometimes get paid commission for deals where new revenue is obtained. Recently have been denied commission with the argument that the additional revenue obtained by upgrading and existing product or service is not considered new revenue.

Having been a small business owner before, I find that outrageous and have asked for further clarification, however I wanted to get some opinions.

Basic example:

If I have a subscription for which I pay $20pm and that service provider sells me an upgrade to a premium subscription for $100pm, isn't the additional $80pm considered new revenue to the service provider?

Mjacc
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Re: Are upsells considered net new revenue?

Post by Mjacc » Tue May 02, 2017 4:08 pm

Would have thought that if it was contract based, it would be considered new revenue, but from an existing or recurring customer.
As you say, the $20pm would be considered recurring

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4liters
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Re: Are upsells considered net new revenue?

Post by 4liters » Tue May 02, 2017 6:58 pm

Give them the choice paying you properly or giving you a fuel card for your boat
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happyfriggincamper
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Re: Are upsells considered net new revenue?

Post by happyfriggincamper » Tue May 02, 2017 9:51 pm

Can't argue your point - it's logical and good organisations will have commission structures based on a balance of Acquisition/Retention/Upsell metrics (or a calculated total revenue) - which is (should be) structured against cost-to-serve/acquire metrics. From what you have posted, it sounds like your company defines "new revenue" as "acquisition" only - (and not knowing the commission structure - presuming its acquisition based only) are pulling a fast/cheap one on their sales team/you.

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