Land and Expand

What is Land And Expand?

The “land and expand” strategy is a growth tactic that focuses on initially acquiring a small deal or entry point with a new customer (“land”) and then progressively increasing the scope and value of the relationship over time (“expand”).

• The landing phase involves securing an initial, smaller deal with a new customer. The objective is to get a foothold in the customer’s organization by addressing a specific need with a tailored solution. Success in this phase relies heavily on demonstrating immediate value and establishing trust.
• The expanding phase happens after successfully landing the initial deal, the focus shifts to deepening the relationship with the customer. This normally involves upselling (offering higher-tier or additional features of the existing product) and cross-selling (introducing new, complementary products or services).

The core idea of the land and expand strategy is to start small, prove value, and gradually broaden the scope of the relationship. For this reason, it works best for businesses using subscription-based models (e.g., SaaS), which are dependent on customer retention.

On average, you have about a 5%-20% chance of closing a new customer. The likelihood you’ll sell more products to an existing one is more than triple that — 60%-70%.

Therein lies the power of land and expand: it capitalizes on the lower cost of acquiring a new customer, and then maximizes their potential lifetime value by continually expanding the relationship.

Synonyms

• Account expansion
• Expansion strategy
• Growth strategy
• Account-based marketing (ABM)

Elements of a Land And Expand Strategy 

As mentioned above, there are two main components of “land and expand”:

• The “land” phase
• The “expand” phase

Your land strategy is focused on getting that first purchase. The #1 priority of your expand strategy is to build momentum off that initial purchase.

Let’s dive into each of these in more detail.

The “Land” Phase

“Landing” is all about securing that first deal with a new customer. This phase is crucial, as it sets the tone for the rest of the relationship and can determine whether or not the “expand” phase is successful.

Here are some key elements of the “land” phase:

• Targeting. Your sales and marketing teams identify potential customers who would benefit from your product or service.
• The sales process. From qualification through to closing the deal, land and expand sales is about finding the perfect solution for each prospect. This is what ensures customer loyalty.
• Personalization. Finding the ideal solution means personalizing your offering to address each customer’s (and buying group member’s) specific needs and pain points.
• Pricing. Offering a competitive and attractive price point for the initial deal entices the customer to choose your product or service over competitors.
• Value demonstration. Showing the customer how your product or service can provide immediate value and solve their problem(s) gets them to say “Yes”.
• Onboarding. Providing a smooth onboarding experience for the customer sets the precedent for the rest of the relationship, and ensures they are set up to succeed with your product or service.

To get more customers in this initial phase, businesses offer a smaller solution to establish trust, gain valuable insights from the customer experience, and demonstrate their value proposition. A free trial or limited-time offer is a basic example of this in action (though you’ll need more than just that).

The “Expand” Phase

Once the customer is on board and seeing value from the initial deal, the focus shifts to expanding the relationship. While retention is an essential part of this, expansion strategies go beyond taking measures to ensure customer satisfaction.

Here are some key elements of the “expand” phase:

• Customer retention. Some of your customers will expand without any need for additional support from you. This is common in the B2B SaaS industry, where users will have to add members to their subscriptions or upgrade to a higher tier as they grow their business.
• Upsells and cross-sells. These are the core drivers of growth in land and expand strategies. Now that you’ve established trust and proven value, it’s easier to introduce new products or features and persuade the customer to upgrade.
• Account management. Account managers are responsible for nurturing customer relationships, fixing problems, helping clients/customers get more value out of the product/service, and identifying opportunities to expand the account.
• Customer advocacy. When customers are successful with your product, they can participate in referral programs, case studies, user-generated content creation, reference calls, and all sorts of other revenue-generating activities.

Your customer success team plays a huge role here. They’re the ones who build relationships with customers, drive additional sales, and facilitate advocacy through your customer advocacy program.

Customer service teams also play a vital role in the expansion phase. They are responsible for maintaining high levels of service, which keeps customer churn rates down.

Benefits of the Land And Expand Strategy

Land and expand is one of the best strategies because it’s customer-focused. As a business, basing your strategy on delivering exceptional experiences that add value to customers’ lives is a recipe for success.

There are several benefits to implementing a land and expand strategy:

• Lower barrier to entry. The initial deal is usually smaller than a typical enterprise sale, making it easier for the customer to say “Yes”.
• Risk mitigation. By starting with a small deal, you can mitigate risk for both parties. The customer can try out your product or service without making a large commitment, and you can gather valuable insights from their experience.
• Cost efficiency. Targeting existing customers for expansion is often more cost-effective than acquiring new ones. This strategy allows businesses to allocate resources more efficiently and focus on high-growth potential areas within their current customer base.
• Steady, predictable revenue growth. The gradual expansion of accounts ensures consistent revenue growth over time, rather than relying on large one-time deals.
• Stronger customer relationships. By focusing on value demonstration and providing excellent support throughout the entire customer journey, you build strong relationships with your customers.
• Higher CLV. Since customers will stay with you for longer and spend more as time goes on, customer lifetime value is generally higher with a successful land and expand strategy.
• Brand advocacy. A huge part of the land and expand strategy is getting customers to become advocates for your brand. In addition to customers spending more with your business over time, they’ll also generate new revenue through word-of-mouth marketing.

That said, there are a few prerequisites to successfully executing the land and expand business growth strategy.

You need to have product-market fit. Your target customer needs to want your service, be willing to pay for it, and be able to get value from it. And the need for your product has to be ongoing — if someone’s issue is one-and-done, they won’t stick around to buy more.

Next, you need a scalable business model (and product) that allows for incremental expansion. If your product can’t handle an influx of new customers, you’ll quickly become overwhelmed and fail to meet customer expectations.

Industries that Thrive with Land And Expand

As mentioned above, the land and expand approach works best when (a) the product has an ongoing need and (b) customers will naturally want to expand their usage of the product.

There are four industries that strongly fit these criteria:

• Software-as-a-Service (SaaS)
• Enterprise technology solutions
• Professional services
• Financial services

Software-as-a-Service (SaaS)

If you’re selling a SaaS product, you’re in a strong position to use land and expand strategies. As long as your product is designed with the potential for expansion in mind, this approach can work well.

Common SaaS products that thrive with land and expand include:

• Content management systems (CMS)
• Website builders
• Marketing automation tools
• Customer relationship management (CRM) systems
• Project management software
• Sales engagement platforms and enablement tools
• RevOps software

Most SaaS products that do well with land and expand are in the B2B space. Since individual needs and budgets are normally somewhat limited, it’s not common for individual users to expand their product usage beyond a certain point.

Enterprise technology solutions 

Enterprise technology solutions are another great fit for land and expand strategies. These solutions often have a lot of moving parts, so there’s almost always room to upsell the customer — especially if you have a range of products.

For example, say your product is an enterprise resource planning (ERP) system that integrates various operational systems into one platform. A company may start with just one aspect of their business on your ERP system and gradually add more over time.

The added benefit to enterprise tech is that switching costs are high and large businesses generally prefer a consolidated tech stack. Retention, loyalty, and expansion rates are usually higher because of this.

Professional services

Professional service providers, like marketing and advertising agencies, also have success using land and expand. Since these services are often ongoing, there’s a natural opportunity for expansion as the client’s needs change or grow.

For example, an agency may start with managing a company’s social media and eventually expand to providing full-service digital marketing. Or, the success of social media campaigns could motivate the client to spend more on advertising and content creation to make a higher ROI.

Financial services

Financial services do well with the land and expand growth strategy because of their highly personalized nature. As customers’ financial situations evolve, they generally require more services from their providers.

For example, someone may start with a basic checking account, but eventually add on services like savings accounts, credit cards, loans, and investments. Financial service providers can also use upselling tactics to increase revenue from existing clients, such as offering a higher tier of service with personalized financial planning or wealth management.

Trust is also crucial in financial services. Customers would prefer to do this kind of business with the company they’re already familiar with (and that’s already familiar with them). So, being able to deliver a great product/service and build a solid relationship with customers means they’re highly likely to expand their business with you.

Example of Land And Expand in Action

To help you understand the concept of “land and expand,” let’s take a look at a hypothetical scenario. Suppose you’re a SaaS company selling a project management tool. Your target customers are marketing agencies.

Land: Initial engagement with a single department

To land customers, your sales and marketing teams have some work to do.

• Build brand awareness and showcase your product’s unique selling points through targeted marketing campaigns
• Attract potential clients to your website using SEO content and PPC ads
• Find the ideal point of contact for your product within large marketing agencies
• Conduct demos and presentations to show the value of your PM tool

Once you get a potential client’s attention, you’ll use solution selling tactics to understand their pain points and align your product’s benefits with their needs.

After presenting the value of your project management tool, they decide to move forward with proof of concept (POC). At this point, they’re only going to implement your tool in one social media campaign to test it out and see if it fits their needs.

Assuming the POC is successful, the client will sign the dotted line and implement the tool in the social media department’s campaigns for a trial period.

Expand: Scaling across departments and projects

After a successful trial, the social media department sees huge improvements in efficiency and campaign performance. They like the platform’s ability to centralize communication and visualize progress on everything they’re working on. Investment in the platform seems to be worth it to them.

Now, you, the vendor, work with the department to create a case study highlighting these successes. Your main focus is on reduced clutter, improved communication and collaboration between departments, and a better client experience.

Armed with the positive results, the sales team targets other departments within the agency — content marketing, SEO, and client services. To facilitate agency-wide adoption, you offer training sessions that demonstrate how different teams can use the software to enhance their workflows and achieve better results.

Once the users reach full value, the real fun happens. You’ve already expanded across the whole organization. 

Now, you can:

• Upsell advanced features and premium plans, based on how they’re using the platform (your usage analytics will show this)
• Ask them to write a testimonial or participate in your referral program
• Work with them on a full-fledged case study
• Include them in beta testing when you roll out new features

At this point, the client’s investment goes beyond your tool. They’re advocates invested in the company’s future.

Getting Started with a Land And Expand Strategy 

When you decide you’re going the land and expand route, there are a few considerations and things to remember.

• Don’t oversell. Pushing too hard during the initial deal leaves little room for future expansion. It’s important to balance the initial sale with the potential for future growth.
• Map out the customer journey. Understand how your product/service can add value to different departments or areas of the customer’s business. This will help you identify expansion opportunities and tailor your sales/customer success approach.
• Tailor your product to be modular and versatile. This will allow for easier expansion and customization for different departments or use cases.
• Align sales, marketing, and CS teams. An integrated tech stack, streamlined communication and data sharing between departments, and a collectivist mindset across the company are prerequisites to a successful landing and expansion.
• Be proactive. Don’t wait for clients to come to you. Use engagement and product usage data to identify expansion opportunities.
• Personalize. The more you’re able to make your interactions unique to each customer, the more receptive they’ll be to advocacy and increased spending.

Technology’s Role in Land And Expand

Technology is the biggest enabler of land and expand strategies. If you don’t have the right tech, you don’t have a strategy to execute.

• CRM & CMS software allows you to capture customer data, track progress, and manage accounts.
• Analytics tools help identify usage patterns, predict churn and define opportunities for expansion
• Collaboration tools, like project management or communication platforms, enable smoother workflows between different departments and teams.
• CPQ (configure, price, quote) streamlines sales and renewals. It also makes upselling easy through guided selling.
• Customer success and advocacy platforms facilitate proactive engagement with customers and make it easy to run customer-focused campaigns.
• Your product itself (in the case of SaaS products) gives you critical information on churn risks and engagement opportunities in the form of usage analytics.

It’s also worth mentioning that technology’s role in land and expand goes beyond the customer-facing aspects. Using the data from these tools to improve your products and customer experience is equally important for continued growth and expansion.

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