Is Your Land and Expand Strategy Working? 4 Quick Fixes

For many companies in the SaaS space, the strategy is to take a “Land and Expand” approach to growing revenue. The premise of the strategy is to “land” the customer (sometimes for a lesser price or a lesser product, or fewer seats), with the intention of “expanding” that customer in the future through upsell or cross sell.

Unfortunately, the expansion piece of this strategy often falls short.

Why? Because land and expand strategies skip a crucial step: Adoption.

To maximize expansion revenue, you need to maximize adoption first. Why would a customer buy more if they haven’t fully consumed what you’ve already sold? Here area few questions to consider:

• Do your customers use all of the features of what they bought?
• Are all of your customer’s end users active?
• Have they reached their license capacity limit?

Symptoms of a Broken Strategy

There are many signs that point to customer adoption problems:

• Little upsell or cross sell (the obvious one), and flat renewals
• Churn
• Lack of user advocates
• Low NPS ratings

Diagnosing Adoption Issues

Data and metrics can help you pinpoint where adoption issues exist. Follow these steps to get a clearer picture:

First, get the overall picture

Adoption Percentage: For a given period, total number of unique logins divided by total number of seats sold. This metric is a basic measure of the percentage of licensed users who are using your product.

Gross Penetration: Total number of logins divided by total number of prospective users (…if you’re selling licenses by the seat. Otherwise, consider some other penetration metric that ties to how you price license capacity).

Gross Penetration tells you how well you are doing with the prospective “audience” that could or should be using your product.

Then hone in on problem accounts

Adoption Percentage per Account: Stack rank accounts from low to high to see who needs your help first.

Adoption by Feature by Account: Total number of key events in your application by account. This metric will help you to pinpoint areas of your product that end users are not adopting. (Note: Focus on the top 3-5 features of your product and measure each of your customer’s adoption based upon these features)

And then get granular with your end-users

Inactive End Users. First, define what an “active user” is. A common example would be at least one login per month. Then develop a list of users who don’t meet this threshold and flag them as inactive.

*Where seat licenses don’t apply and you’re a B2B company, you can use an assumed percentage of total number of employees

4 Things You Can Do Today to Drive Better Adoption

Get your hands on some good data

Work with your product team to extract usage data so you can identify overall adoption rates as well as identify end users who are not adopting.

Remediation plan

Create a remediation plan that defines what you will do about end users that are not adopting. Remediation plans should have two tracks:

• Develop an adoption plan for key stakeholders and other important players at an account that includes the involvement of your Customer Success team. I’d recommend developing a playbook that incorporates education and training with use case development.
• Develop an automated plan for the remaining end users that Customer Success does not interact with directly. Create an Adoption Marketing process for your end users.

Beef up your content

Review your content inventory and ensure that your end users have access to the content they need to be independently successful.

Don’t forget about your Voice of the Customer program.

If you’re doing surveys, especially NPS, ensure that you’re surveying all of your end users and not just key stakeholders. Listen for clues about areas of your product that your end users are struggling with.

After reviewing the data, what you will probably find is that there is a large percentage of your customer base who have end users that are not adopting and there is a lot of room to increase user adoption. The issue may even be going undetected.

Simply put, if your customer isn’t using the products and services they are currently buying from you, they are not likely to buy more. Let’s get it fixed 🙂