Nextian CPQ automatically calculates values for New Sales / Cross-Sell and Upsell for Monthly Recurring Revenue (MRR) and as well as Non-Recurring Revenue (NRR) as sums of MR and NR totals of quote line items and the New Account / Logo flag.
Just like in case of New Account / Logo, the values are propagated onto the following objects:
Synced Quote → Opportunity → Order
While the “classic definitions” (e.g., ones used in eCommerce) of these metrics are pretty straightforward, they take a slightly different meaning in the world of subscription services and need:
- Separate calculations for monthly recurring and non-recurring charges / revenue
- Considering line item type: e.g., a new service build-out, replacing a service or handing a service request
- Handle quotes having a mixture of line item types (e.g., new service, upgrade, re-term, etc.)
The table below compares the two:
| Metric | Classic eCommerce Definition | Subscription Services Definition |
|---|---|---|
| New Sales | Purchase of a primary product | Services for new logo customers (first time sale to a new account) |
| Cross Sell | Purchase of anything in conjunction with the primary product | New services for existing customers |
| Up-sell | Purchase that makes primary product more expensive (upgrade, premium) | Service upgrades (including replacement with a new service) and re-rates |
So, following the definitions above, the calculations are performed as follows (sums of MR Total and NR Total on individual line items):
| Line Item Type | New Logo | Existing Business |
|---|---|---|
| New | New Sales (MRR & NRR) | Cross-Sales (MRR & NRR) |
| Change Service Add-Ons | N/A (requires an existing service, so the account cannot be a new logo) | Upsell (MRR & NRR) |
| Replace | — | Upsell (MRR & NRR) |
| Re-Term / Re-Rate | — | Upsell (MRR & NRR) |
| Service Request * | — | Cross-Sales (NRR only) |
| Cancel ** | — | — |
* Service Requests have only non-recurring charges associated with them
** Cancellations are excluded altogether from NRR / MRR calculations
| Important | Since businesses use varying definitions of New Sales, Cross-Sell and Upsell that may be different than what has been outlined above, the calculations can be customized during implementation. |
