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Not all land and expand strategies succeed...
Three ways to expand.
Land & expand strategies.
Land and expand strategies, which are designed to provide an easy entry point for a new customer with the goal of growing them into a bigger customer, are popular with SaaS companies. And no wonder. When these strategies work, customers naturally, almost inevitably, add users and upgrade for access to more software capabilities over time.
Expanding on their original purchase is a win for customers, who gain additional value at a low incremental price while enjoying the training, integration and operational cost advantages that come from sticking with the same vendor. It’s a huge win for the software company too, since most expansion revenue falls directly to the bottom line and deeper account penetration increases customer stickiness and lifetime value.
But not all land and expand strategies succeed. Often the expand phase never really happens or results are far below expectations.
Why?
Not all land and expand strategies succeed...
One reason is that land and expand is sometimes applied to sales situations that don’t warrant it. Buyers maneuvering for advantage may promise large expansion opportunities later, which fail to materialize.
To avoid being misled, sales teams should look for these characteristics before pursuing a land and expand strategy:
- Numerous people within a group will use the software
- There are multiple potential user groups, preferably in separate locations
- The software is easy to use and doesn’t require extensive training or specialized skills
- Initial groups will use the software in a typical, not unusual, manner, so their experience will be an applicable reference for subsequent users
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