If you’re in sales, you’ve likely heard the buzz about the importance of driving customer expansion versus only focusing on new logo acquisition. The cost of acquisition is being scrutinized by many organizations and tech stack consolidation is on the rise – making it more difficult to land new customers in today’s environment. 

Specifically, within the technology industry, sources say it can cost 4-5x more to land a new customer than retain an existing one. Not to mention, customers have more options than ever before, which is why making your product “stickier” is becoming increasingly important. 

With all that being said, it’s clear that organizations need to have a strong customer expansion strategy in place. Expansion is not only more cost-effective, but these customers have a greater ROI (a retention rate increase of 5% can result in a profit increase of 95%).

So, how do you reduce the risk of churn and guarantee that your customers will stay forever loyal to your product? You focus sales efforts on driving cross-sell opportunities. 

Customer expansion is a multi-step process. To increase the chances of expansion, companies need to improve their ability to identify cross-sell opportunities, make data more accessible to their teams, and have more data-driven conversations with customers.

Common customer expansion challenges

Overall, the struggle for sales teams to identify cross-sell opportunities is often due to a limited understanding of the customer's existing usage, which prohibits them from spotting “greenfield” departments to sell into. 

Without understanding how a customer is using your product today, it’s like throwing a dart while blindfolded and hoping you hit the bullseye. 

Specifically, sales teams struggle to drive customer expansion because they don’t understand the value the customer is receiving. And without this understanding, they’re unable to provide data and evidence to back up their case for expansion.

Oftentimes, the challenge of getting a sales rep to understand their customers is exacerbated by a lack of CRM notes, high rep turnover, and poor communication with post-sales teams. If your sales team doesn’t have strong relationships with CSMs/AMs, they may be left feeling in the dark.

There’s nothing worse than reaching out to an existing customer without referencing specific details about their usage of your product, or forgetting to mention that they’re a customer at all. We’ve all been there.

Sales faux pas like this happen all the time if your sales team doesn’t have data-driven insights at their fingertips. The reality is that sales missteps within your customer base erode trust and exude thoughtlessness, which can hurt your chances of customer expansion in the long run. However, there are ways to improve this process.

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How to remove customer expansion roadblocks

Today, sales reps can no longer expect to book expansion meetings because they’re a customer alone. Instead, reps need to earn the right to a meeting by highlighting the value their product is providing. So, how do you earn the right in today’s world of mass emails and cluttered inboxes? Through data-driven content.

Leveraging data-driven content to help drive customer expansion is like removing the blindfold that’s inhibiting your sales team from identifying new opportunities. Additionally, having access to data-driven insights through internal reports and expansion decks can improve the relationship between sales and post-sales (AMs, CSMs, TAMs). 

The beauty of data is that it states the facts. When sales and post-sales have access to the same data, you’re ensuring tighter partnerships, and an opportunity to catch red flags and cross-sell opportunities faster than ever before.  

Not to mention, your AEs won’t need to bother your post-sales team with requests for customer insights, because they’ve been enabled to access them independently. As a result, cross-functional teams can focus their conversations on how to execute customer expansion strategies, instead of not knowing where to begin.

For example, here at Matik, our AEs and SDRs leverage an internal report (generated by Matik) to illuminate customer usage data that otherwise would be buried within the product and inaccessible to them. From there, sales reps can leverage insights like usage and ROI statistics to lead with value in their outreach.

The impact

In summary, giving your sales team access to data-driven insights can unlock your team’s ability to cross-sell. By improving internal communication and leveraging data-driven presentations to surface customer usage from disparate sources, sales reps can:

• Confidently understand their customers and their journey
• Identify cross-sell opportunities through product usage data 
• Lead with value in customer outreach by sharing ROI statistics 
• Partner more closely with post-sales teams

It’s clear the focus on “expanding” versus “landing” customers is here to stay. Pursuing customer expansion strategies is a cost-effective way to boost retention, expand revenue, and create loyal customers with multiple use cases deployed. 

Looking for expansion opportunities is only one pillar of driving customer retention, but there’s no denying that it's an essential part of any sales motion.  

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