Land and Expand

Guidelines for Effective Bottoms-Up Selling 

Seed and Grow. Bottoms Up. Land and Expand.

These terms refer to the sales strategy that begins with one small win, followed by a sequence of efforts that expand revenue within an account.

In the early days of a SAAS business, top line growth may provide an illusion of land and expand working well.

You won’t know for sure, however, until you define a sales framework to measure expansion into additional lines of business.

Executing such a framework, at scale, requires a business to:

• Segment sales resources by landing and expanding efforts
• Segment expansion by selling-across,selling-within, and selling-up

Its worth looking at each half of land and expand in more depth.

Landing

In securing your initial win, speed is paramount. The sooner you can get to dollar one, the less friction you will have in pursuing a larger footprint within an account. Some principles for optimizing the landing:

Avoid Deal-Creep

In the early stages of a sales cycle, it can be easy to paint a broad picture of the dozen ways your technology can be used. It can be tempting to loop in additional groups across the business that may be interested in your product. It can be tempting to up-sell your feature set into areas beyond your prospects initial pain points.

Don’t do this. It will add complexity to your deal, while increasing risk to the larger opportunity.

Narrow in on a specific problem and do not rest until your customer is delighted with your solution. Map out the decision makers and influencers for the first win, and focus your efforts on this team.

Specialize Sales Teams

The sales motion of securing initial wins (new logos) is very different from the sales motion of expansion within accounts (existing logos).

New logo reps, often called account executives, are adept at overcoming first-time customer hurdles. These center on proving company credibility, demonstrating the reliability of your technology, and working through red-lining of commercial terms.

Existing logo reps, often called account managers, are focused on establishing longer term relationships with your install base. They should be adept at ensuring extremely high customer satisfaction — and understand how to navigate across an organization as they execute longer duration cross-sell and up-sell opportunities.

The incentive plans, and the candidate profile for each of these two selling motions will differ. Specializing teams will help you develop expertise, and iterate on sales processes tailored to the unique stages of you customer lifecycle.

Specialize Playbook

There are typically two opportunity profiles you’ll be pursuing, and segmenting your approach for each one will help you accelerate time to the first win.

Takeouts are opportunities to displace a competitive solution already deployed at a prospect. These sales cycles focus on educating and proving why you have the better platform, and why you are the better vendor. Budget already exists for these opportunities, and your goal is to transfer this revenue stream.

Greenfield opportunities focus on educating prospects why your technology solves a business problem they don’t have a solution for. Your sales motion will focus on the problem domain itself, and building a business case for why a solution is needed. Budget may not exist upfront, but if you build a compelling enough business case with a high enough sponsor, budgets can often be found.

Identifying the type of opportunity you are pursuing, and customizing your sales playbook to the profile will allow you to accelerate the time to landing.

Expanding

The average life time value (LTV) of your customer base should be growing. Three techniques to accomplish this, each of which should be measured independently: Selling-Across, Selling-Within, and Selling-Up.

Selling-Across

Larger businesses have multiple functional departments (i.e. Finance,Sales, Marketing) and multiple business units (i.e Software, Hardware, Services). Your cross-sell strategy should systematically track progress across each across these departments within an account.

Functional Cross Sell: Seek out functional teams across the org that are similar to your landing team. Your landing business case has a high probability of resonating with these groups. Assume, for example, your first win was the Sales team of Acme Co’s Software business. Pursuing all Sales teams across the organization is your next step. Ask your landing sponsor for warm referrals into these groups.

Departmental Cross Sell: If your technology is horizontally applicable (i.e. file sharing), you’ll have an opportunity to expand to other functional teams within the landing business unit. Going back to Acme Co — you’ll want to prioritize all departments within the Software Business Unit who could leverage your tool. Once again, seek the assistance of your landing sponsor for warm intros to these teams.

Selling-Within

There is enormous opportunity to expand revenue within your initial landing group. Two paths to consider:

Up- Sell : Expedience in the pursuit of the initial landing likely led to a baseline roll-out of your technology. There will be additional features your customers have not yet adopted . Prioritize your ongoing education and enablement activities on how these new features can enhance the value of the initial implementation.

Organic Growth: Many of your customers will growing fast— and will naturally use more of your product as their business expands. If your landing department’s sales team doubles, for example, your license revenue will follow a similar path. This can be a great sign of an excellent product, solid account management, and great customer service. It’s not, however, a metric of how well you’re expanding across an account.

Distinguishing between organic growth and up-sell growth is critical as you measure the results of your cross-selling activities. Some business will customize incentives around organic growth vs. cross-sell to optimize account management investments.

Selling-Up

Once you have at least one business unit on your platform, you’ll be in a position to explore and accelerate a corporate wide standard. This can take many forms. One structure is the ‘site-wide’ license. This is often accompanied by a top down mandate of your technology becoming the corporate standard for your category. The details of this deal type will vary, but a couple high level points to keep in mind:

Start High. Identify the highest ranking role within the account who would be interested in your domain, typically C-level (and often CIO’s). Educate them on how your technology is being used within the organization, and explore how they see your tool fitting in the longer term vision of their company’s IT strategy. You will also want to learn what process they have in place for becoming a corporate wide ‘blessed’ tool . Your goal is to gain this individuals trust, and have them champion your growth across the business over time.

Play the Long Game. Selling-Up should happen in parallel to your selling-across activities. Top down sales cycles for large organizations can often exceed 12 months, even in the best case. The advantage of having a bottoms up playbook is you can pursue new revenue opportunities as the longer term scenario plays out. Approach the top-down process with a long term horizon, but don’t let it slow down your cross-selling efforts across the lines of business for shorter term wins.

Execute. Measure. Iterate.

As with any business strategy, the most difficult part is execution. Land and Expand is no different.

Once you’ve defined your expansion framework, invest upfront in the tools to measure how well you’re doing against plan. Establish a regular cadence to review whats working well , and remain flexible to adjust as you learn more about the business.

Do this well, and you’ll have sales levers to keep your customers happy, while growing the average life time value of your customer base to it’s full potential.