Quota split is incentive design
How you split quota between new business and expansion determines which behaviors your comp plan actually rewards. The math is simple. The incentive consequences take more care.A blended quota, where all booked ARR counts the same regardless of source, appears simple. In practice it creates a substitution effect. Reps will pursue whichever motion converts faster or pays better in their territory. The business ends up under-investing in whichever pipeline type is harder or slower.
Separate quotas, one for new logo ARR and one for expansion ARR, force intentional coverage of both motions. The tradeoff is administrative complexity and the need to decide who owns expansion: the AE who closed the original deal, the CSM managing the account, or a dedicated growth AE.
Three quota models and when to use each
| Model | Description | Works well when |
|---|---|---|
| Fully separate | AEs own new logo quota; CSMs or growth AEs own expansion quota | You have distinct new-logo and expansion teams |
| Blended with floors | Single quota, but reps must hit a minimum threshold in each category | One-team model; you want simplicity with guardrails |
| Weighted blended | New logo ARR counts at a premium multiplier vs. expansion ARR | New logo acquisition is a strategic priority over expansion |
Tying the split to your growth model
The right split follows from your ARR growth equation. Start with your NRR. If existing customers are growing on their own through upsell and cross-sell, a larger proportion of your total ARR target can be assigned to new logos. If expansion is fragile or NRR is below 100%, new-logo quota needs to carry less weight so reps are not set up to fail.
Build your quota model from the top down: set the total ARR target, subtract the expansion ARR you expect from the existing base under a realistic NRR assumption, and assign the remainder to new logo quota. From there, layer comp mechanics to reinforce both motions.
Incentive distortions to watch
Separate quotas do not eliminate all distortion. Watch for reps holding back expansion opportunities until a new quarter when they need the credit, or sandbagging expansion to protect a floor attainment number. Track expansion pipeline separately from new logo pipeline so you can detect these patterns before they affect your forecast.
Internal links that give more context on the underlying metrics: net revenue retention and expansion revenue.
Frequently Asked Questions
Should new business and expansion quotas be separate?
In most growth-stage B2B SaaS companies, yes. Reps optimizing a single blended quota will default to whichever motion is easier to close. Separate quotas enforce intentional investment in both new logo and expansion pipelines. The right structure depends on your go-to-market model and whether AEs or CSMs own expansion.
What is a common quota split ratio between new business and expansion?
There is no universal ratio. The correct split is derived from your ARR growth target, your NRR, and how much of your growth plan is funded by existing customers versus new logos. A company with very high NRR can afford a smaller new-logo quota; a company with high churn needs new-business quota to carry more weight.
Does blended quota cause problems?
Yes. Blended quota creates a substitution incentive: reps learn the path of least resistance and over-index on it. If expansion closes faster than new logos, expansion dominates. If new logos pay higher SPIFs, expansion atrophies. Separate quotas with separate comp tracks eliminate this distortion.
Put these metrics to work
ORM builds custom revenue forecast models that turn concepts like how do you split quota between new business and expansion? into prescriptive action for your team.
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