In SaaS, growing revenue from your existing customers isn’t optional—it’s survival. Two of the most common approaches are intra-expansion and tiered expansion. At first glance, they seem similar: both aim to deepen wallet share. But how you grow matters just as much as whether you grow.
Intra-Expansion happens when customers increase usage within their current plan—adding more seats, consuming extra API calls, buying additional storage. It’s an invisible, low-friction way to scale revenue alongside customer success. Customers don’t feel “upsold”—they simply succeed more and pay accordingly. This model fits beautifully in product-led growth strategies, where the goal is to make value so obvious that expansion feels inevitable, not negotiated.
Take Slack, for instance. A small startup might start with just a handful of users on the Free or Standard plan, then organically add seats as new teams sign on. There’s no awkward “upgrade” meeting—teams just invite more people, and their monthly bill rises in lockstep with their headcount. Over time this seat-based intra-expansion becomes a major driver of Slack’s revenue growth.
Tiered Expansion, on the other hand, requires customers to jump to a higher plan to unlock more advanced features or support. It’s a cleaner model when there’s a clear separation of value between customer segments—like startups versus enterprises. Done well, tiered expansion can signal maturity, encourage commitment, and boost deal sizes. Done poorly, it feels like a hard paywall at the exact moment a customer is finding momentum.
Consider Salesforce. A growing company might start on the “Essentials” or “Professional” edition, but once they need advanced reporting, workflow automation, or multi-currency support, they’re effectively forced into the “Enterprise” or even “Unlimited” edition. That jump delivers a big bump in revenue—but it also feels significant to the customer, who must justify the added spend internally.
In my experience, intra-expansion outperforms tiered expansion for most SaaS businesses today—especially those targeting SMBs or mid-market. It mirrors how customers naturally grow and lets companies monetize success without introducing unnecessary friction. That doesn’t mean tiered models should disappear. For major jumps in value—like enterprise security, governance, or customization—moving customers into a new tier still makes strategic sense.
The best SaaS companies don’t pick one or the other. They design pricing models that start with intra-expansion as the default—then offer thoughtful tier jumps when the customer’s needs truly evolve. It’s not just about revenue. It’s about respecting how your customers grow—and growing alongside them.
