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How Land and Expand Strategies Breakdown

by Hank Barnes  |  March 31, 2015  |  Submit a Comment

In my post last week, I mentioned Gartner research that uncovered that the most common reason for a no decision in buying was when anticipated project or solution costs exceed the budget.   For providers, this means two things.

First, the idea of growing the scope because of increased value and bringing other groups into the deal is a path fraught with uncertainity.  Proceed with caution.

Second, and many providers already embrace this, land and expand is a great alternative approach.  Start small (“foot in the door”) and then sell more.   The concept of “it is easier to sell to existing customers” often comes to play here.

But land and expand strategies can breakdown.  Most commonly, they’ll breakdown when this is entirely a sales driven approach and not one embraced by the whole organization.  Then you are really playing in a house of cards.

house_of_cards

You can’t just land and expand.  You have to land, colonize, then expand.  By colonize I mean establish value and a foundation for a broader relationship.   Unfortunately, that does not always happen.  In fact, in another recent survey, 44% of the technology buyers revealed that they feel that less than 25% of their providers consistently work with them to maximize value.    If that is happening, your land and expand strategy is based in hope.  My colleague, Todd Berkowitz, is working on a document that will explore the importance of delivering value before trying to grow business in more detail.

For land and expand to work, everyone in your organization–but in particular professional services, sales, and support–must be aware of and embrace the strategy.  The initial sale (landing) should not be viewed as the completion of the sales process—it is the beginning of the deeper process..  All parties who engage with the customer need to be focused on demonstrating value.  The customer experience has to be fantastic.  Do this right, and expansion often follows.  In the same survey,  Gartner uncovered that by demonstrating value, providers can expect more than 2/3 of their customers to be highly likely to buy more from them.

My recommendation, remove the term “land and expand” from your vocabulary.  Change it to “land, colonize, and expand.”   It doesn’t flow off the tongue as easy—but it will help create the mentality across your organization of what truly needs to be done.  Landing is the start of the long term opportunity, but that alone does not open the door for expansion

 

Category: future-of-sales  go-to-market  

Tags: buying-process  customer-experience  land-and-expand  sales-process  

Hank Barnes
VP Distinguished Analyst
6+ years at Gartner
30+ years IT Industry

Hank Barnes provides research and advisory services on go-to-market strategies for technology providers. His research efforts focus on understanding the dynamics, challenges, and frustrations enterprises face when buying technology products and services. He then applies that research to explore the implications on vendor strategies, supporting the efforts of product marketing, general managers responsible for product portfolios, and CEOs. Read Full Bio




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