What is an expansion playbook?
Expansion is exactly what it sounds like: a playbook to expand existing accounts already on your product.
Expansion playbooks are popular for Product-Led Sales teams because they leverage existing users who are happy with your product as the primary funnel to generate more revenue. It costs more money for your team to acquire net new customers than simply improving retention and deepening your relationship with existing customers.
Let’s dive into this playbook and how to operationalize it with Pocus.
In SaaS, you can have many types of pricing plans. The most popular plans you’ll see are either seat-based or consumption-based.
With seat-based pricing plans, you’ll see the subscription prices scale based on the number of users or seats on the account. This incentivizes your sales and success teams to look for opportunities to scale the number of seats the customer is using.
Here’s an example of Zoho CRM’s seat-based pricing model where you can see that each pricing plan is charged per user per month.
SaaS companies often choose this model for its simplicity and predictability.
Another example is Airtable’s pricing plan. Airtable is designed for collaboration, the more team members on Airtable the more value you can drive.
Now imagine you’re a salesperson at Airtable. Seat expansion is going to be a very important playbook for the sales and customer success teams. The pricing model and economics directly incentivize the go-to-market team to look for seat expansion opportunities. More seats equal more collaboration equals increased retention and, therefore, revenue.
Should you run a seat expansion playbook?
Seat expansion is not for everyone.
If your pricing model doesn’t scale based on the number of users, then there is no direct economic incentive to increase seats.
However, for many products, collaboration and multi-player usage is an important lever for deepening engagement and expanding value. So even if the economic incentive doesn’t exist directly, your team may still benefit from a seat expansion play.
Number one reason to consider an expansion playbook? Account upside - You have tons of users across many accounts but account penetration is low.
Try this playbook yourself
Decided to run a seat expansion playbook? Great! Here’s how to set it up in Pocus.
What you'll need
- Product usage data about existing customers
- Account level data from your CRM
- Product-Led Sales tool like Pocus
- An AM or CSM team to execute the playbooks
- Messaging that explains why an account should add more seats
#1 Choose a goal for the playbook
For seat expansion the goal is quite easy. You want to increase seats by either a percentage change or an absolute number.
#2 Choose what customer segments should be in this playbook
What customers would you typically target for seat expansion? Use this question to help you pick the right segment. This does not have to be very granular. A good segment of customers for seat expansion are paying customers who already have more than 1 seat.
#3 What internal teams should be executing on this playbook?
What teams will be responsible for running this playbook? For seat expansion, we’ve seen PLG companies where Account Executives own this, others where Account Managers or Customer Success own expansion. By choosing teams and individuals here you’ll control who gets to see seat expansion leads in their Pocus Inbox and Slack alerts every morning.
#4 Define the plays your teams will run
This is where things get interesting. What triggers indicate that an account is ready for seat expansion? What is the next best action to take when that trigger occurs? This is how we define each play - a trigger (a qualifying event in their user journey) and an action (taken by your team or automated in another tool).
Here are some examples of triggers to consider when running a seat expansion playbook.
- Account Upside is greater than X - Calculate what percentage of the employee count at the company is not using your product. That’s the upside where your sales team can expand the footprint of the account.
- Account growth rate is greater than normal - What does the month over month or week-over-week growth in seats/users look like today? If it grows over the norm in a single month this is a good indicator that an expansion opportunity exists.
- # of free users is greater than the # of paid users - What are the # of free users on the account vs. # of paid users on the enterprise plan. If there are a number of free users but only a few paying, it may be time to make the case for growing the enterprise user footprint.
- Key enterprise feature is turned on - If an enterprise feature like SSO is enabled it makes it easier for the entire company to use the product. This is a key trigger for a seat expansion conversation with the workspace admin and decision maker.
Use these signals to determine if the account has expansion potential and run specific actions based on these triggers to engage with users in the account. These actions can be broken into actions your sales team completes, this is called a human touch, or an automated action completed on your team's behalf, we call this a tech touch.
Seat expansion plays
How are plays operationalized for your team?
The Pocus Inbox.
See every account that enters your seat expansion playbook with clear instructions for what to do next.