Expansion Levers
Levers to drive account expansion aka net recurring revenue (NRR):
- Raise prices (perhaps the fastest & best growth lever)
- Customer Success
- Onboarding
- Ongoing value delivery
- Prioritize accounts for cross-sell & upsell by quantifying the gap between account potential and existing spend
- Upsell: Selling more users/usage/seats to current buyer or migrating existing relationship to higher package tiers
- Cross-sell: Three flavors:
- Selling more users/usage/seats to a new buyer in a current account
- Selling a new product to current buyer
- Selling a new product to a new buyer in a current account
- Implement in-app, product-led prompts to upgrade
Aligning CSMs and Sellers (AE/AM) to Drive Expansion
- My general guiding principle is that sellers are responsible for all commercial motions and CSMs for non-commercial (usage, engagement, etc.)
- Strive to pair sellers and CSMs so they share as many accounts as possible (aka pod structure)
- Build and run proactive expansion ‘plays’ for CSMs to run, or better, for pairs of CSMs/sellers to run. At minimum, this involves:
- Identifying the right accounts to engage (based on customer health, need, etc.)
- Creating collateral
- Training/enabling CSMs/sellers (remember to enable first line managers first)
- Monitor activity, effectiveness, and results
- That being said, you have a number of options to create incentives for CSMs to drive expansion:
(in order from least to most behavior driving which is also from least to most aggressive)- (helpful but rarely sufficient) Create a recognition program to celebrate expansion success
- Maintain a public leaderboard showing expansion by CSM (usually % rather than $)
- (recommended) Include NRR for their book of business as part of their compensation
- Include CSQL generation (usually # not pipeline) as part of their compensation
- (not recommended) Pay CSMs a direct commission on either individual account expansion or net expansion for their book of business