What is the land and expand strategy?
The land-and-expand strategy starts when you land a small deal with an organization and use the contract to form a solid relationship with the organization by providing superior service. Then, you continue to sell to the business across different projects and expand your services and profit margins over time. It is also known as the “seed and grow” strategy.
With a land and expand strategy, you can also build long-term relationships with customers by offering them personalized service tailored to their needs. And since most businesses are looking to grow their customer base, they will be more open to working with you in the future if they see value in doing so.
This is an effective strategy because it gets your foot in the door with new clients who trust you with larger projects. This can help you stand out from competitors and grow your business faster than if you had immediately gone after large contracts.
Let us say you have a SaaS (Software As A Service) product that allows companies to send email newsletters easily. You could start by selling this tool to one company, but then you can expand your reach by offering additional products from within your software suite. For example, this new customer may want an uncomplicated way to track their email campaigns, so you also provide that service. Over time, more customers will become aware of your brand because they hear from each other and like working with your company because of its good service record.
What are the benefits of the Land & Expand strategy?
The Land & Expand strategy is a trendy way to grow your business. It involves finding an underserved market and then expanding into that market.
Here are the benefits of this strategy
Here are the benefits of the land-and-expand strategy:
1. You establish yourself as a trusted partner – When you start working with a business, they may be apprehensive about your company and its services. You can show them that you are the right person for the job and build trust in your brand by doing excellent work on a small project.
2. You get more clients through referrals – If your client is happy with your work on their project, then it is likely that they will refer you to other businesses in similar industries or others who need similar services. This can lead to exponential growth over time!
3. Longer Customer Life – With a more valuable customer base, your sales team will have more opportunities to sell additional products and services to existing customers. This can help you grow your overall customer base by making your product or service an essential part of their daily lives.
4. You can grow your profit margin over time by adding new services at higher price points as you gain more experience working with clients on multiple projects (and they see how well you do).
The market requirements for land & expansion to work.
Here are some key things to consider when deciding if Land and Expand is suitable for your business:
1. Product-market fit (PMF) – It is that moment when you build something that people love. You know it has happened when your growth rates are high, your net promoter score (NPS) is high, and you have increased user retention.
2. Market – Is there enough demand in the market for what you are selling? If not, Land and Expand probably won’t work because it is going to be too expensive for you to acquire customers who are not interested in buying from you. You want to make sure there is enough demand before investing a lot of money into acquiring customers who will not buy from you anyway.
3. Sales Team – Is your sales team ready for this strategy? Do they have the skills, experience, and resources to execute it? Is there an existing pipeline that you can leverage? Having a sales team that is well-trained and equipped with the right tools can help ensure that your company keeps growing.
4. Product/service – You need to have a product or service that both meets the needs of your target users and solves a problem for them effectively. You also need to make sure that it is something that people want or need enough that they will pay for it. When searching for inspiration, look at successful businesses in similar fields but with assorted products/services
5. Inbound marketing – It can help you attract customers and grow your business. It is a strategy to attract content leads and convert them into sales. The goal is for people to find you online and make their way through the sales funnel until they become customers. Inbound marketing is much more cost-effective than outbound strategies because it relies on organic search engine traffic rather than paid ads.
It is also suggested to build an SEO (Search Engine Optimization) strategy addressing all three stages of your sales funnel:
TOFU (top of the funnel) – You need a high conversion rate on your SEO content to capture new leads. The keywords you choose should be relevant to your business and target audience, and potential customers should highly search for them. The content should be relevant to the search query and include relevant keywords.
MOFU (middle of the funnel) – You need more in-depth content that is valuable for your readers. This will help you convert leads into sales. The content should be well-researched, have a clear purpose, and be written engagingly.
BOFU (bottom of the funnel) – You need to convert leads into customers and provide great customer service so that they stay loyal to your brand.
The product side of land & expansion?
When you think about your business, what do you consider? You could focus on the people who work for you, your brand’s mission statement, or even how much money you are making. But one thing that often gets overlooked is the size of your product line.
The problem with not thinking about the product side is that it can be difficult to grow when you need the right products to meet demand. If your product line is not scalable, it will be hard to add new stores or expand into new markets without much extra work, which takes time away from growing your company!
How to restructure your sales & marketing process around this strategy?
A few years ago, it was common for companies to have separate sales and marketing departments. In fact, this is still the case in many organizations and even in some of the most innovative ones. However, this approach is changing rapidly.
The reason for this change is simple: There’s no clear distinction between the two departments. As we move toward a digital world, where customers interact with brands differently, there is more overlapping between sales and marketing functions than ever before.
The logical step would be restructuring your sales and marketing processes to fit the new scenario. First, it no longer depends on the sales department. Still, one unified unit of three departments working together: Sales, Marketing, and Customer Success departments, mainly because the land-and-expand strategy is the concept of your current customers being your best sources of revenue.
The sales department will need to focus on customer acquisition and conversion — that is, how to attract new customers (lead generation), convert them into paying customers (cold calling), and then help them get the most out of their product or service (customer success).
Marketing will focus on creating awareness about your product or service and driving traffic toward your website through search engine optimization (SEO), content marketing, social media marketing, influencer marketing, etc.
Customer success will focus on what happens once they become customers — how can they continue using the product or service and ensure they get value out of it? This could include onboarding them into their system so they know how to use it efficiently or even sending them a monthly email newsletter with tips on how they can get more out of their product or service.
Role of Customer Success in scaling
Customer Success is the backbone of any business, but it is essential for companies looking to scale and expand. That is because your company’s success is directly tied to the satisfaction and happiness of your customers.
The land and expand strategy is an excellent way for companies to grow their business. It allows them to focus on generating revenue from established customers while simultaneously building relationships with new customers. However, as companies grow and move through each stage of the land and expand their strategy, they must be prepared to adapt their approach. A one-size-fits-all approach will only work for some companies at some stages of growth. Customer Success needs to evolve with the business to continue providing value and supporting your customers’ needs.
Here are three reasons why Customer Success should be a part of your land and expand strategy:
1. The customer experience is paramount in growing your business
There are many reasons a customer might churn from your product or service, but one of them is their experience with your brand and/or product. If you want to grow your business, you need to ensure that every customer has a fantastic experience with your brand from start to finish.
2. Strong customer success programs help you retain more customers
To maintain high retention rates, you must ensure that every new customer has a great onboarding experience with your product or service. This means providing them with the right tools, training, and support to get up and running as quickly as possible (and hopefully stay!).
3. Strong customer success programs can help you increase your revenue
If you want to grow your business, you need to ensure every customer has a vast experience with your brand from start to finish. A strong customer success program provides every new lead with the proper training and support to get up and running as quickly as possible (and hopefully stay!).
The Problem with Land and Expand – Reasons why this strategy may not work for you
The land and expand strategy is one of the most popular sales methodologies. It is simple, effective, and easy to understand.
However, it is also an approach that can easily fall short of its desired results if you do not put the proper process and tools in place to support your sales team.
Here are four reasons why your land and expand strategy may not be working as well as it could:
1. No Defined Target
If you do not know your target audience, how will you know if or when you have reached them? You can only expect to win over customers if you know what they want or need from your product or service. The first step in any successful land and expand strategy is to define your target customer group as clearly as possible (or groups).
2. Unclear Sales Messaging
You know your product or service is excellent but do not know how to get prospects interested in it. If you do not have clear messaging that resonates with buyers, then they will not buy from you — no matter the size of their company or budget. You need messaging that tells people exactly what your product does, what problem it solves, what you do differently than your competitors, and why your prospects should buy it.
If you do not have a clear, repeatable sales process that gets results, then what makes you think that customers will sign on with you when they see your solution? They will not! And if they do sign on with you, what makes you think they will continue to renew at the end of each contract term? They will not! Your sales process needs to be rock solid so that every salesperson can deliver results consistently — whether they sell one customer at a time or hundreds of customers in one go. They also need the right tools to analyze the data and make informed decisions
4. Incumbent Has The Advantage
In many industries, incumbents already have large customer bases. In this case, they can leverage their existing customer base to make it difficult for new entrants like you to break into the market. This makes it more challenging for new players to gain traction with customers if they can offer something substantially better than what is already available today.
Elements of successful land and expand strategy
There are three key elements of lucrative land and expand strategy:
The customer experience should be as frictionless as possible. The goal is to make it easy for customers to buy your product, no matter what channel they use. This affects everything from user experience to payment processing to the customer support experience.
Exceptional customer experience
Customers need to be delighted with the product and the company, both during the sale process and after they have become a customer. They need to feel like they are getting more than they expected. This is an area where most organizations fall short — but it is also one where it is elementary to differentiate yourself if you do it right.
Time to Value (TTV)
Customers should be able to get value out of your product quickly — within minutes or hours at most, not days or weeks. This is especially important in B2B companies where sales cycles can take months or even years (which means months or even years before customers pay you anything).
Like what you are reading?
Sign up for our newsletter
Top Examples of land & expand strategy
When it comes to Asana, their hybrid self-service and direct sales model gives them the flexibility to target companies of all sizes and shapes. They can reach teams everywhere efficiently and then rapidly expand the use of their platform within those companies. Most of their paying customers initially adopt their platform through self-service and free trials. Once adopted, customers can expand through self-service or with the assistance of their direct sales team, which is focused on promoting new use cases of Asana. As customers realize the platform’s productivity benefits, managing their work and achieving customers’ objectives often becomes critical, which drives further adoption and expansion opportunities.
Successful Land & Expand businesses also tend to make rather large R&D expenditures. Asana spends even more on R&D (63%) than Atlassian (44%) or Slack (39%) according to a Tomasz Tungaz in his write-up titled “Asana S-1 Analysis – Comparing One Productivity Powerhouse to Another”. You can afford it as a Land & Expand business, and you must. Your primary growth engine is the product. You can’t grow if you stop inventing.
Basecamp is another example of a company that used a land & expand strategy to grow into an enterprise software company. Basecamp started as a small web designing company in 1999 and became a leading project management software. Basecamp followed the strategy of scaling its product and offering more features. They built an initial product that solved the needs of their core audience and raised venture dollars to create new products and features. Even today, Basecamp remains focused on its original ideas instead of trying to compete with larger enterprise software companies like Microsoft Project or Salesforce Workday by building out a ton of tools to keep acquiring new customers.
Dropbox’s success is an example of what the land-and-expand strategy must work. You can land with a good app, but you can only expand by adding an enterprise sales team. Your app needs many features ranging from authentication to access controls. These features are not fun or exciting to develop, but they make enterprise sales possible. Without them, your product will be too basic for large companies and their IT (Information Technology) departments to consider using it in production.
Slack has leveraged the benefits of the “land and expand” concept with its Slack Connect feature. Instead of growing within organizations, Slack Connect allows it to scale beyond. Slack Connect allows its customers to create channels with other companies. It enabled businesses to use Slack in a new way that goes beyond just standard human-to-human communications by bringing the idea of instant communication between businesses. This feature is exclusively for the paid users who could start interacting with each other by sharing the invite link.
Now that you know what Land and Expand is, it is time to start getting your customers to become your next growth engine. The best part of this strategy is that it is simple. If you have already built a good relationship with your customers, they are likely to be receptive to any invitations you send out. It is just a matter of sending out a few invitations or talking at the right moments.55
Look at what your customer is trying to accomplish. Find a way to help them achieve that with one of your products and/or services. Assisting the customer to accomplish what they need will build trust with the customer. Understanding their valid pain points will keep them returning for more of your brand because they feel like you care. It is all about building that trust with the customer.
Rakhin has over 10 years of experience driving business development and client services. In his prior roles, he stayed close to customers to understand their requirements and help them achieve their business goals. He is passionate about customer success.
Published November 22, 2022, Updated November 22, 2022