How do we comp reps on expansion/upsell deals when they're working alongside a CSM or account manager?
Split commission 50/50 AE and CSM/AM for expansion deals under $50k; AE takes 70/CSM 30 for $50k+ (CSM's relationship still matters, but AE drove the execution). Use a clear deal-source attribution matrix or reps will fight over credit. Expansion commission is where most teams create comp civil wars.
AE says she sourced it; CSM says she owned the relationship. Both think they deserve 100%. The fix: written attribution rules applied before the deal closes, not retroactively.
Expansion Deal Attribution Rules:
| Deal Type | AE Credit | CSM/AM Credit | Reasoning |
|---|---|---|---|
| CSM identifies need, AE closes | 70% | 30% | AE drove the execution and negotiation; CSM surfaced opportunity |
| AE identifies need, CSM supports | 80% | 20% | AE owns the expansion strategy; CSM supports as implementer |
| Joint discovery + joint close | 50% | 50% | Both equally contributed; no clear owner |
| CSM closes (no AE involvement) | 0% | 100% | CSM is the seller; AE contribution was zero |
| Add-on product (bundled, same contract) | 100% | 0% | Part of original deal close; AE already earned it |
The Problem with "50/50" Default:
Most teams give CSM 30–50% on all expansion deals ("they own the relationship"). This incentivizes CSM to expand and AE to ignore expansion ("CSM will do it"). Result: expansion rate drops because AE doesn't hunt for it.
Better: AE gets 70%+ on expansion, CSM gets 20–30%. This keeps AE hungry for expansion while rewarding CSM for relationship health.
Commission Rate Structure (Expansion-Focused):
Assume: AE gets $15k commission on $100k new customer. CSM gets nothing on new customer (AE's close). Expansion rules:
- Expansion <$25k: AE 70% ($10.5k), CSM 30% ($4.5k). Small upsell; CSM's relationship work is supporting, not leading.
- Expansion $25k–$100k: AE 60% ($9k), CSM 40% ($6k). Medium expansion; more collaboration.
- Expansion >$100k: AE 50% ($7.5k), CSM 50% ($7.5k). Large expansion; partnership deal. Or: AE 55%, CSM 45% if AE drove discovery.
Why Tiered Attribution Works:
Small expansions ($10k–$25k) are usually CSM-sourced ("Hey, we see you're using Feature A heavily; Feature B solves your next problem"). AE's job is to negotiate and close fast. CSM gets a smaller cut because the heavy lifting was done by her over months. AE gets bigger cut because she converted the opportunity in 1–2 weeks.
Large expansions ($100k+) require both AE and CSM. AE needs to do discovery to uncover the $100k problem; CSM's relationship makes that discovery possible. They both own it, so 50/50 or close.
The Attribution Matrix (Best Practice):
Define these upfront in writing. When a deal enters CRM, mark the "expansion source":
- CSM-Sourced: CSM logged the opportunity, CSM noted in CRM "customer asked about Feature X." AE picked it up from there.
- AE-Sourced: AE discovered unmet need via executive conversation or proactive outreach. CSM supports closing.
- Joint-Sourced: Both AE and CSM discovered the need; both had conversations with customer. Rare; treat as 50/50.
- CSM-Closed: CSM closed the expansion deal directly (small upsells, feature add-ons, tier upgrades). No AE involvement. CSM gets 100%.
By marking source in CRM, you remove subjectivity. The deal is attributed at entry, not argued at payout.
Expansion Commission as CSM Performance Metric:
Most CSMs aren't measured on expansion revenue (AE's KPI). This creates misalignment. Better:
- CSM bonus: 50% on NPS/retention, 50% on expansion attach rate. "You own customer health. Healthy customers expand. Expand more, earn more." Pavilion data: CSMs with expansion-tied bonuses drive 25% higher expansion revenue than CSMs on pure retention metrics.
- AE bonus: 50% on new customer revenue, 50% on existing customer expansion. "You're a growth engine. New logos and expansion both matter." Forces AE focus on expansion account hunting, not just greenfield hunting.
The "Add-On" Exception (No Commission):
Small feature add-ons (third-party integration, extra storage, compliance module) that are part of the original contract negotiation don't warrant a new commission. These were priced into the original deal. Paying commission on add-ons incentivizes AE to undersell the original deal, then upsell the "add-ons" separately.
Don't do this. Add-ons are part of the base contract; no expansion commission.
Red Flags:
- CSM gets 50%+ on all expansion (disincentivizes AE expansion hunting).
- No written attribution rules; reps argue over credit on every expansion deal.
- Expansion commission calculated retroactively (after deal closes; invites disputes).
- Add-on features counted as expansion (inflates expansion metrics artificially).
- AE gets 100% on expansion, CSM gets nothing (CSM stops caring about expansion).
Example Scenario:
Customer bought $100k 3-year contract Year 1 (AE earned $15k commission). In Year 2, CSM identifies the customer needs advanced analytics module. CSM sets up meeting. AE negotiates; customer agrees to $30k add-on (one-year deal, renews separately from main contract).
- If split 50/50: AE $4.5k, CSM $4.5k. Both feel fairly compensated.
- If AE takes 100%: CSM is annoyed; she surfaced the need. She stops sourcing expansion.
- If CSM takes 100%: AE didn't participate in negotiation; she should get something. But if AE gets nothing, she ignores expansion.
- Correct approach: AE 70% ($6.3k), CSM 30% ($2.7k). CSM gets recognized for sourcing; AE gets majority for executing.
TAGS: compensation,expansion,split-commission,cro-ops,account-management