In sales “Land and expand” usually refers to a strategy to land a customer with a small deal, and then sell into the organization to expand your footprint to more seats, additional departments or more products & services.
Nowhere does this make more sense than in SaaS. In a typical low-touch SaaS “sale,” an individual user signs up for a free trial, then converts to a paid user. Then you get as many other users in that company as you can. That’s land and expand.
If you have a great product this will happen organically to some degree. User number one will tell a colleague, and now you have two users. They invite some more colleagues, and you have a few more users. As teams collaborate, share information, send data and manage workflows, this organic user growth inside a company is what happens.
What land and expand isn’t
It’s a beautiful thing when you have this sort of network effect inside an organization. It’s the best kind of growth—the kind that happens naturally from the value of your product.
But, organic user growth of this nature is not a land and expand strategy. It’s just a by-product of product-led growth. It’s bottom-up growth, and it’s great.
But it’s not enough.
Too many SaaS companies leave dollars on the table by relying on the natural ‘radiate’ effect of their product and failing to back it up with people and processes that solidify the relationship between the customer account and product.
The best way to complement bottom-up growth is to have a top-down account sales strategy. Let the users spread your solution across the organization. But while that is happening, you put in the work to develop deep, long-lasting, strategic relationships with the customer organization.
What land and expand is
A land and expand strategy isn’t having one user naturally lead to ten users. A land and expand strategy is having persistent, deep connections with high-level decision makers in the customer’s company. It’s working to transform your product from a tool that some employees have adopted to a solution that the organization has prioritized. It’s working at the account level, not the user level.
Real land and expand requires people and process. It doesn’t just happen. The number of users inside of a customer account may grow, but they are a loosely held together tribe. At the first whiff of “consolidate tools,” budget cuts, or new leadership you are tenuous ground. What you want is buy-in for adopting and deploying your SaaS at the highest-level inside of your customer’s organization.
You want the company to select your product, not just the users in the company.
The SaaS land and expand strategy
So, in SaaS, the strategy should be to complement bottom-up growth with a top-down sales effort. There are lots of names for this—account development, customer development, sales. The name doesn’t matter. Executing consistently and putting enough muscle behind the initiative is what matters.
For “low touch” SaaS this may mean monitoring new user signups to spot those who are employed at your ideal customer accounts and then immediately kicking off a process to begin the land and expand efforts within that customer account.
For higher touch SaaS that use sales teams, the process is mostly the same. The process gets kicked off as the deal closes, and you continue to work on maintaining close ties with your primary decision makers and forge new relationships across the organization.
Who you need for land and expand
Customer development isn’t a sales strategy or a customer success strategy. It’s a business strategy.
In some companies the development function sits on the sales team. In others, it’s part of the customer success organization.
I think customer development is best when it’s part of the customer organization. The customer-facing teams (support, customer success, etc) already have the workflow of managing and communicating with your customer, and information can flow more freely when the dev function reports up into the customer organization. But the role isn’t a customer success role.
Customer success supports the individuals adopting your product. Customer development supports the organization in adopting your product. There’s a difference.
If customer development does report to sales, it’s important to keep in mind that “expand” is a different skill set than “land.” It’s farming versus hunting. I’ve seen expand strategies distract a sales team from the core mission of closing new business. For that reason, if customer development has to report into sales, I recommend that those reps be specialized and dedicated to that effort.
In either case, much of what is done at the account level to “expand” are the same types of activities as sales (demos, presentations, high-level business conversations, etc), but they are approached and executed differently because your foot is already in the door. That’s why I like this function inside of the customer teams—it can be a natural part of relationship management and integrated into the touchpoints between account and company.
The land and expand process
Ideally, a customer development executive is getting a report of new user signups so they can catch ideal customers early before wide user adoption has even started.
Customer development can start from day one by making themselves a resource to a key account. By getting to know all the potential stakeholders. By understanding how the organization is structured. By understanding the broader potential use cases and business impact of your product.
As the product starts to be adopted, customer dev can begin working on making high-level connections inside of the customer account (ideally with introductions from the current users, but independent of that if need be). Activities undertaken by customer development can range from cold outreach to hosting lunch and learn sessions for the customer employees, conducting executive presentations, and participating in quarterly business reviews.
The expand process, like a sales process, should have defined stages, activities and objectives.
The commitment you need for land and expand to work
The biggest reason land and expand strategies fail is lack of follow through and commitment caused by unrealistic expectations. Customer development can’t get done part-time, and it can’t be a “stop/start” initiative. It requires sustained ongoing efforts from dedicated resources.
When a SaaS company can afford to put dedicated resources on customer development depends on several factors. At $1 million in ARR a company is likely too small to have a dedicated resource, but it can be done by a combination of sales, customer success and founder-level involvement.
SaaS land and expand KPIs
Your land and expand process likely won’t be applied to every customer you have, but it will be applied to a subset—those key accounts who fit your ideal customer profile and have the opportunity for growth and wider adoption.
Land and expand is a strategic initiative that should carry quotas and KPIs so that you can track and monitor the impact. KPIs can include:
- An increase ARPU from key accounts
- Broader adoption across the organization (new departments or seats as a direct result of customer development initiatives)
- Higher adoption of high-value features
- Higher-level customer engagement with executives and key decision makers
- Revenue booked by the customer development team
When you understand the compelling metrics behind negative revenue churn, the case for land and expand starts to become a pressing business imperative. An increase in MRR is a great KPI for land and expand initiatives, and is perhaps the most objective way to measure success.
What can you expect from land and expand
Hopefully, the outcomes are obvious to you.
More purposeful relationship building with your ideal customers leads to higher customer and revenue retention, which also results in higher LTV.
Land and expand is a long-haul strategy that takes patience and resources, but it solidifies your company’s place within your ideal customer accounts and is well worth the effort.