Which term describes additional revenue generated from existing customers through upsells?

The term that describes additional revenue generated from existing customers through upsells is known as expansion revenue. This concept refers to the income that a company obtains from its current customer base by promoting additional products or services. By focusing on upselling, businesses can leverage their existing relationships and enhance customer lifetime value, leading to increased profitability without the proportional increase in acquisition costs associated with gaining new customers.

In a subscription model, for instance, expansion revenue might manifest through customers upgrading to a higher-tier service or subscribing to additional features, thus driving revenue growth from a familiar customer segment. This approach is often more efficient than attracting new customers since existing customers tend to have a better understanding of the brand and its offerings.

The other options pertain to different business concepts. Gross margin relates to the difference between revenue and the cost of goods sold, often indicating overall profitability but not specifically linked to upselling. Churn rate measures the percentage of customers who stop using a service within a given timeframe, indicating customer retention rather than revenue generation. Net Promoter Score (NPS) assesses customer loyalty and satisfaction without directly addressing revenue impacts.