To have successful expansion revenue generation with your existing customer base, otherwise known as expand selling, your sales, services, customer success, and marketing teams must work together in new ways to continue accelerating revenue growth at scale. Although lead generation programs are already quite common in technology companies, many of them only focus on generating new leads, rather than leads you can gain from existing customers. To take advantage of this untapped opportunity, it’s important to know the difference between lead generation for “land” and “expand” selling, as well as how you can optimize this key element to accelerate revenue growth.
The LAER Model
For an overview of the different types of customer engagement activities, we can refer to the TSIA LAER model:
- Land: All of the activities required in gaining a new customer.
- Adopt: All of the activities involved in making sure the customer is actually adopting the solution that was implemented.
- Expand: All of the activities required in helping current customers expand their budget and spend on existing implementations with the company.
- Renew: All of the activities required to ensure the customer renews their current relationship with the company.
While many lead generation programs primarily focus on “land” selling, that is, gaining new customers, there is a lot of opportunity to earn more revenue from your existing customer base through “expand” selling efforts. (Tweet this!) However, it’s important to note that many of the key aspects of lead generation programs that focus on new customers are quite different than those focused on existing customers. By understanding the basics of how each tactic works, you can then optimize your lead generation programs for the appropriate target audience.
“Land” Selling: Lead Generation for Landing New Customers
When it comes to finding new customers, it is typically up to your marketing department to take ownership of these efforts and invest a substantial portion of its budget in finding new customer revenue opportunities. The types of lead generation activities aimed at gaining new customers can be anything from strategic use of search engine optimization (SEO), to webinars, and even conferences, just to name a few. Marketing then collects the qualified leads gained from these efforts and provides them to sales.
Depending on the size of the company and complexity of the sales lead opportunity process, marketing might even work with a separate lead generation CRM system to track and measure the quality of the leads they generate from their efforts. Also, the role and level of involvement between sales and marketing can also vary from company to company. Here’s what a typical process flow for land selling looks like:
“Expand”: Lead Generation for Expand Selling to Existing Customers
In contrast, the key elements of an expand selling lead generation program look quite different. In this case, multiple functions (services, customer success, and sales) work to generate leads through direct customer interaction, while marketing serves primarily as internal support. (Tweet this!) Direct account management can also be an interface for lead generation, depending on company culture and how these account ownership roles are defined. Because many other functions besides marketing are involved in this process, the amount of marketing's focus and budget is currently less dedicated to expand selling lead generation than it is for new customer (land) selling.
At TSIA, we’ve found that the added complexity is a key driver to marketing’s reduced focus, with more “cooks in the kitchen” and interfaces to contend with. Unfortunately, it’s this lack of involvement from marketing that often results in a less coordinated and optimized expand selling program than their land selling counterparts.
Does your company’s expand selling lead generation program need improvement? We encourage you to map the functional and system elements involved in your current expand selling lead generation efforts following the templates in the images above. By mapping out your process flow, you’ll be able to get a top-level view of where you are currently, as well as ways your program could be improved through optimization.
Want to Learn More? Come to TSW!
These recommendations are merely the tip of the iceberg when it comes to ways you can optimize your expand selling lead generation program. If you’re interested in learning more about our expand selling insights and recommendations, be sure to come to TSW 2015 Service Transformations and attend my Expand Selling Power Hour session, "Building a Strategic Framework for Growing Customers Successfully". In this one-hour presentation, I will be covering this topic as well as how you can build a strategic framework for optimizing expand selling within your organization.
About the Author
Mark Middlekamp is vice president of research, Expand Selling, for TSIA. He has nearly 30 years of experience in sales, marketing, and software product management. Mark is dedicated to helping sales, services, and marketing organizations generate more profitable product and services revenues leveraging Cloud and outcome-based operating models. He can be contacted via email at firstname.lastname@example.org.