Land and Expand Part I: An Alteryx and UIPath Case Study
Most companies in SaaS will be aware of how difficult it can be to successfully sell to a new customer - cold emails and calls are some of the least efficient ways of converting leads, simply because of the daunting task of convincing a customer who has never used a product to commit to it.
As such, many SaaS tactics, including those we’ve written about, fixate on reducing how daunting committing to a new product can be: free trials, product-led marketing, referrals, etc. Land and expand is an adjacent strategy that has been tried and tested by multiple companies with huge success, precisely because it works so well to bring customers into their orbit. The strategy involves “landing” with a customer or company with a smaller product or a free trial - this low commitment first step is approachable for a customer, and allows this user to become familiar with the company’s ecosystem. Once the product has landed with a customer, as it gains traction and becomes entrenched in the customer’s workflows, the sales team starts to target the customer to “expand”, leveraging word-of-mouth and familiarity to sell more services to the customer and their colleagues. Upselling and/or spreading within a company is sometimes the easiest way to increase your ARR.
One prominent pioneer of land and expand is Alteryx, a data analytics software company used by scientists and data analysts. Because of the relatively high price of their products - more than $5000 per user per year - they use a land and expand strategy. Using free trials, curious analysts can try out the software and organically incorporate the product into their team’s workflows. As word spreads within a company, the product spreads by itself. In order to enhance that growth, Alteryx oftentimes directly contacts their leading customers, helping them understand new use cases, and even helping these leading customers present their work to their colleagues. Using a person’s colleagues to sell a product gets a foot in the door, and makes actually buying the product a significantly less formidable prospect.
Another great example of a SaaS company utilizing land and expand is UIPath, a firm that automates different business workflows. In a similar way to Alteryx, UIPath lands at a company by automating a specific process, and from there, UIPath’s automation hub - a central platform to manage automation - positions that firm to expand into different product offerings. UIPath can then encourage the expansion with events, inter-department contests, or other initiatives that get different workflows exposed to UIPath.
These two firms recognized the power of being adjacent to their target customers - by bringing potential buyers into your product’s proximity, UIPath and Alteryx made their sales efforts significantly more efficient and effective.
This article was a collaboration between Archit Bhise and Alex Li