Optimizing Customer Expansion for B2B SaaS

Episode summary

About this episode

Eddie Tormanen, Head of Customer Success and Delivery at Union Square Consulting, walks through the operational framework that separates companies sitting on untapped expansion revenue from those executing it deliberately. With experience expanding accounts at Salesforce and leading go-to-market operations, Tormanen brings practitioner-level clarity to a motion most companies treat as an accidental byproduct of good relationships rather than a measurable growth engine.

The core insight is simple but rarely executed: most companies neglect expansion not because they lack the revenue opportunity, but because expansion is harder to measure, harder to execute, and requires accepting that not all customers are worth expanding. Unlike new business acquisition, which offers repeatable playbooks and clear ROI metrics, expansion demands a finite view of your customer base, ruthless segmentation, and willingness to say no to expansion attempts that won't work.

The reframe that changes everything is treating ICP expansion potential the same way you treat ICP acquisition potential. Companies typically define ICP by who closes fastest and pays most upfront, then wonder why those same customers churn or never expand. Tormanen shows how to audit your existing customer base backward from lifetime value, not forward from first-deal revenue. The companies you can expand are not always the ones easiest to land.

The episode covers the mechanics: how to segment customers by expansion capacity, map product and stakeholder whitespace, design a capacity plan that actually works, build scoring that prioritizes accounts worth pursuing, and set up the fundamentals before chasing adoption. The second half focuses on execution bottlenecks, how to avoid annoying your best customers while maintaining consistent outreach, and the critical handoff between customer success and account executives that most companies botch.

Topics discussed

What we cover in this episode

1:08
Why companies ignore expansion New logo acquisition is more measurable and repeatable than expansion, making it easier to justify budget allocation and prove ROI.
6:10
ICP defines expansion potential Ideal Customer Profile must account for retention and expansion capacity, not just acquisition speed and initial deal size.
9:06
Audit customer base by lifetime value Work backward from total customer value through their entire contract history to identify which cohorts actually expand and retain.
21:00
Framework for finding expansion targets Identify expandable customers first, verify they are healthy, confirm organizational structure supports your additional products.
22:38
Product and stakeholder whitespace Map which customers have which products and which key stakeholders you have relationships with versus those still untouched.
28:12
Execution as the missing piece Teams map whitespace but fail to drive consistent engagement activities; without process discipline, whitespace analysis produces no revenue.
31:24
Product matters for expansion strategy Platform businesses with multiple use cases expand differently than single-use products; expansion playbook depends entirely on what you sell.
38:37
Go-to-market efficiency pyramid for expansion Fundamentals layer covers ICP, process definition, capacity planning, account scoring, sequencing, and whitespace mapping before adoption.

Quotable moments

The lines worth sharing

Most companies pour their energy into acquiring new logos while sitting on untapped revenue inside their existing customer base.
Rachael · 0:03

Expansion is neglected because it's just more complicated, it's harder to measure and it's harder to execute.
Eddie · 3:13

If you don't have a strong relationship with a Crow or a CMO, then we're not going to be able to do the strategic work that we want to do.
Eddie · 12:22

You have a finite set of existing customers, and some of those customers are not going to be folks who can expand.
Eddie · 2:56

Frequently asked

Common questions from this episode

Why do companies focus on new logo acquisition instead of expansion?

New business is more measurable and repeatable. You can track payback period, CAC, and pipeline velocity easily. Expansion is harder to quantify because you must first identify which existing customers can actually expand, then execute consistently across a finite customer base rather than an infinite TAM.

How do you redefine ICP to account for expansion potential?

Audit your customer base backward from lifetime value, not forward from initial deal size. Look at which cohorts retained longest, expanded most, and generated the highest margins. Then extract the characteristics those customers share: revenue range, industry, roles, budget, team maturity, and commitment to long-term planning.

What are product whitespace and stakeholder whitespace?

Product whitespace is a simple list of which customers use which products and which products remain unpenetrated. Stakeholder whitespace maps which key decision-makers you have relationships with versus which remain untouched, like CMOs, CFOs, or heads of customer success.

What signals in usage data indicate expansion opportunity?

Red flags vary by product, but look for user adoption rates, feature utilization patterns, and inferred use cases from metadata. High activity with zero opportunities might indicate marketing is using your product. Heavy record volumes with no adoption suggests poor implementation. These patterns reveal what stakeholders to reach out to and why.

How many times should you contact a stakeholder before giving up?

Industry standards suggest 5 to 10 contacts per stakeholder before moving on, but frequency depends on product stickiness and relationship quality. If your product is easily replaceable, annoying customers with too much outreach risks churn. If sticky, you have more margin for error. Always lead with insight and value, not just sales pitches.

What's the biggest execution bottleneck in expansion?

Teams map whitespace but fail to drive consistent outreach. Without regular reporting that shows meeting bookings, activities logged, and pipeline generated per rep, salespeople default to new business. Management must review expansion metrics weekly and hold reps accountable to the same activity standards used for new business.

SEO meta description

Eddie Tormanen breaks down how B2B SaaS companies should systematically optimize customer expansion instead of treating it as an accidental byproduct of good relationships.

Target keywords

customer expansion B2B SaaS expansion revenue growth ideal customer profile ICP expansion product whitespace analysis stakeholder whitespace mapping expansion opportunity identification customer lifetime value analysis account expansion playbook Eddie Tormanen Union Square Consulting expansion execution framework renewal and expansion strategy go-to-market efficiency

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EDDIE0:00All the metrics that we have in go to market. We have pipeline velocity. We have cash and cash payback. Even LTV to carry these things are so much more easy to measure in comparison, to try to figure out what is the cost and the return of trying to retain or expand a customer. It's really, really difficult to to measure this.

EDDIE0:19So a lot of times folks think about ICP in terms of who are the easiest customers for us to acquire, which customers are going to buy the most, have the highest close race, the best payback. But if we then land all of these customers and we can't retain or expand them, and they're really not an ideal customer. If I tell five customers that they need to invest in an implementation partner and get this off the ground the right way, and those five customers do that, and then I can expand three of them or four of them, like Salesforce on average with double spend in the first 12 months, then that's more valuable than telling everybody

EDDIE0:51what they want to hear. You can just literally go into your database and say, okay, we just uploaded a CSV into Salesforce and all of your accounts of the market red, yellow, green. And now, you know, the green accounts for the ones that you want to go after and try to expand. And the Reddit counts are ones you want to try to get in front of a CSM.

EDDIE1:09Welcome to Go to Market Science. In this podcast, we share tangible, actionable playbooks from the trenches working as go to market strategy and rev ops consultants for our clients here at Union Square Consulting and candid conversations with revenue leaders in the market that have been there. Now let's get into it.

RACHAEL1:28Most companies pour their energy into acquiring new logos while sitting on untapped revenue inside their existing customer base, yet they treat expansion as a side effect of good customer relationships instead of a deliberate, measurable growth engine. Today, we're getting into the mechanics of optimizing customer expansion, how to identify where the real opportunities are, revisiting ICP for expansion potential, and what needs to change with our approach to expansion as we go up market.

RACHAEL1:56Hey Eddie, how is it going?

EDDIE1:58Man, that was such a great intro.

RACHAEL2:00Thank you. Getting getting crisper with it.

EDDIE2:03Yeah. Practice makes perfect. What is this like podcast number 40 or 50 for you at this point?

RACHAEL2:08Oh, not that much, but it feels like it.

EDDIE2:11It's got to be up there. Well, anyway, I'm excited to dive into it today. Thank you for putting this topic together. I got a lot to say on this. We've written content on this before. Not exactly this, but like on related topics. And I'm excited to dive in.

RACHAEL2:25All right. So why do you think so many companies default to pouring resources into new logo acquisition instead of focusing on expanding the customers they already have, especially recurring revenue companies.

EDDIE2:37Yeah, well, what I will say is, I think there's an interesting statistic that I've heard recently at pavilion conferences. I forget the exact number, but something like 52, 55% of net new revenue last year was from existing customers. So if you look at it from a revenue perspective, that statement is not completely accurate. It's not that companies are only looking at new business.

EDDIE2:56Clearly they are expanding their customers. But I still think like there's a lot of merit in your question, in that it's still oftentimes ignored by many companies. And I think the reason for that is that if you think about new business, it's more measurable and it's at least theoretically more repeatable, right. And so what do I mean by that?

EDDIE3:16What I mean is all the metrics that we have in go to market, we have pipeline velocity, we have CCaC and CCaC payback. Even LTV to these things are so much more easy to measure in comparison, to try to figure out what is the cost and the return of trying to retain or expand a customer. I did a podcast with Ben Murray where we dove into this and he had a solution for ways to look at this, but it's really, really difficult to to measure this.

EDDIE3:44Whereas with new business, you can say, okay, like we have a payback below 12 months, let's just pour money into new business. This seems to be working. We have a payback below 12 months in this particular channel or in this segment. Like let's double down and let's invest more money. I mean, in our own business, I think I made that decision.

EDDIE4:01I said, let's double our marketing spend last year after all this content that you and I have been putting out is resonated with our audience and brought in a lot of revenue and a lot of great new customers. And so it's a really easy decision to double down on that. I think it's harder with existing customers because you have a finite set of existing customers, and we'll get into ICP in a moment, but some of those customers are not going to be folks who can expand.

EDDIE4:24It gets really complicated. You dive in, you're like, we have X number of customers. Which of these can we expand? How do we expand them? Who do we talk to? Who's unhappy? Who's healthy, who's unhealthy. It's just way more complicated. And we'll get into all of that in today's podcast. But the answer to your question as to why I think that expansion is is neglected is because it's just more complicated, it's harder to measure and it's harder to execute.

RACHAEL4:45In saying that, where do you think the bottleneck usually lies in the execution issue? Is it typically a strategy problem? People? Problem systems?

EDDIE4:52I think it's a lot of things. I think that customer success in general is oftentimes underfunded for the aforementioned reasons, that it's difficult to measure inputs and outputs. If we say, okay, we are. I mean, let's start with the obvious, right? You can't expand an unhealthy customer if you have signed a customer and they're not using your product and they're unhappy and, you know, and, and, and they're sending in all these cases to customer support and complaining about how this doesn't work and that doesn't work.

EDDIE5:21A sales rep calling them and saying, hey, would you like to expand your footprint with us is not going to work. So that's problem number one. How do you solve that problem? Well, you need to allocate resources and customer success to solving that problem. Those resources cost money and they bring down your profitability. And it's not a sure thing that just because we give more time and attention to this customer, they're all of a sudden going to turn around and spend more money with us.

EDDIE5:45Whereas when we look at new business and we say, okay, we spent X amount of money on ads last year and it brought in this much revenue, should we spend more money on ads next year? We spent this much money on salespeople making cold calls and going to conferences, etc. should we spend more money next year? These are easier and questions to answer objectively, whereas in CS, just simply looking at how much money do we spend and what resources do we need in order to keep our customers or get our customers healthy is a harder question to answer, and this is a prerequisite to thinking about the expansion problem.

EDDIE6:19So when I worked at Salesforce, I covered new business and existing business and existing is always easier to sell. But you have to buy forget your customer base. So the first thing that I did every year when I got my territory is going and look at that territory and say, which are my healthy customers and which are my unhealthy customers.

EDDIE6:35And I had a very, very different strategy for each. And this wasn't my strategy that I invented. This is what everybody at Salesforce was doing, because it's pretty obvious when you have these unhealthy customers, you have a CS play. You have to go in and say, can I get them in front of a CSM? Can I get them in front of a, you know, the implementations team?

EDDIE6:53Can I do something to turn this account around and make it healthy? That's very different than okay, I have a healthy customer. How do I expand this footprint?

RACHAEL7:01Well, hopefully we will make that question easier for revenue leaders to answer with this podcast.

EDDIE7:06Yeah, I mean, I think a lot of this is you have to have a hold of your data, right? You have to know who your healthy customers are, who your unhealthy customers are. Within your healthy customers. You have to know which of the types of companies that you can actually expand, because you can have a healthy customer and still have virtually zero expansion opportunity because it's not the right customer.

EDDIE7:24It's not the type of customer that you can expand.

RACHAEL7:26Yeah. Speaking of that, getting into ICP, we've always been pretty vocal about getting ICP right first and foremost. So why is that so critical specifically when it comes to expansion?

EDDIE7:38Well, that's exactly why I stopped my my last answer. Right. I wanted to give you an opportunity to ask this ICP thing because that's that's what ultimately is going to influence expansion, right? So when we think about ICP, the ideal customer profile is the definition of our best customers. And by extension, what that means is these are the customers that are the easiest to sell.

EDDIE7:59Their the easiest to serve, their the easiest to retain and the easiest to expand and buy easiest. What I mean is, it's the least amount of cost and effort and the highest amount of return on revenue, right? So if I can spend a dollar and land a customer that's going to pay me $2 in the next 12 months, and then $3 next year and $4 next year, and $5 next year is an unrealistic example.

EDDIE8:21I mean, I'm just printing money at this point in time, and I will have unlimited access to capital from private equity and venture capital and the public markets. And I can grow this company to hundreds of billions of dollars in revenue if that equation holds true. Right? That is our ICP. So where? That's not true. I'm sorry, I'm sharing an extreme example, but where the opposite is true, where I'm spending $5 to acquire a customer that pays me a dollar and then churns the next year or never expands.

EDDIE8:50I can't make that work, and I can't access more capital to spend more money on sales and more money on marketing, and more money on CS to try to retain and expand that customer. So a lot of times folks think about ICP in terms of who are the easiest customers for us to acquire, which customers are going to buy the most, have the highest close rates, the best KAC payback, etc. but if we then land all of these customers and we can't retain or expand them, then they're really not an ideal customer.

EDDIE9:17And we've experienced this ourselves. I mean, when I started this company, we were landing all of these customers in the beginning and they would just churn out, I mean, we didn't even have a recurring revenue model at that point, but we would do a single project for them, and then they would just never want any help from us ever again.

EDDIE9:31Mostly because they were small companies with no budget. And what I realized was when I, like, bifurcated our customer base, and I looked at the customer spending the minimum amount that we charged versus the customers that were spending more. That second cohort would double their spend with us. They'd do the first project, and then they'd realized there was a lot more work to do, and then they would do a next project.

EDDIE9:52And that for me, looking at that data, told me, we need to modify our ICP. We need to stop selling these projects to these customers because we can't retain and expand them.

RACHAEL10:04So what does a company need to do and look at in order to get the information? The accurate information that they need to redefine their is to make sure that they're going after people, that they can expand in the future.

EDDIE10:17Yeah. So it's interesting that you asked this question when I was working with Jerry, who runs our delivery team this morning on this exact exercise. So I wanted to understand our lifetime value of our customers. And so what I did is I took every customer that we've landed in the last nine years and looked at each one of them.

EDDIE10:34I looked at the lifetime value of that customer through the end of their current contract or their last contract, if they're no longer a customer with us. And then I tried to cherry pick that data to say, okay, which of these companies represent the customers that we're trying to sell today? And this was really validating, right? Because we had customers back in 2016, 2017 that we would never want to work with today.

EDDIE10:56Nothing against those companies. They're just not a fit for what we're trying to do today. And, you know, we kind of separated this out into like our two offerings. We have an offering where we do what we call strategic rev ops, where we're helping with improving process. We're helping with answering questions like those are answering here on this podcast, annual planning, etc. and we have experienced VP's of rev ops going in and helping.

EDDIE11:18And then we have another service where we are doing Salesforce, HubSpot, Marketo, Admin Architecture, etc., which is a little bit more granular. And then of course we have customers that use both. Well, we have a lot of these customers that are on that second tier. And you know, we don't make as much money off of them. We don't charge as much, but they're really loyal customers.

EDDIE11:38They stick around for a long time and we make, you know, good margins on them. Nothing crazy. We want to be fair to our customers, but like, they're really healthy customers for us. And so I literally looked at this data and I said, okay, we basically have two versions of our ICP. One version is this ICP that's great for strategic.

EDDIE11:54And we can land bigger engagements, we make more money on them, etc., etc. it's also just more exciting for us when we get to do more, more work that we're excited about. And then secondly, we have these customers that don't want to do the exciting work. They just want us to like make sure Salesforce and HubSpot and Marketo and Outreach, etc. are working, and we're making good money on that good margins.

EDDIE12:14And oftentimes these customers stick around for even longer because they just see us as their outsourced Salesforce admin, and they'll keep us for three, four, five, six, seven years. So I literally went and looked through the data and looked at this and said, like, would these be customers we would want to land again? Are these customers that we can retain?

EDDIE12:31Are these customers that we can expand and we answer those questions and validated what our ICP is. But if I only look at the data on what it takes to acquire that customer and the revenue we make in the first 12 months, I'm missing the much bigger picture there because most of our customers I mean, what is the point of being in a recurring revenue business if you're not looking at your recurring revenue?

EDDIE12:52Absolutely. And you also have to look at your recurring costs, like, what does it cost us to serve these customers? And we have like every company, we have had customers in the past where it costs us too much to serve that customer. And you have to look at what that means, and then you have to break that down and try to define it.

EDDIE13:07What revenue range are they in? What industry are they in? What roles are in the organization? What are the unique characteristics that are only applicable to your company and your customers that would describe who these ideal customers are? And that's the big thing for us is like, for example, when I worked at Salesforce and I was trying to sell Pardot, you know, don't sell a $20,000 marketing tool to a company that has a $500 website.

EDDIE13:31Like this seems obvious in hindsight, but so often this is overlooked in our current situation. If we don't have a strong relationship with a Crow or a CMO or somebody in that seat, then we're not going to be able to do the strategic work that we want to do. Now. We could be their outsourced Salesforce admin. Of course, that's a little bit easier without that role in place.

EDDIE13:51But if we want to do our strategic work, we need to crow in place most of the time. I think every customer, we have a crow in place, and we also have a great relationship with CMOs and other revenue leaders, but those are things that are really important. It's not just the industry and the revenue and the headcount, and I think a lot of organizations don't go deep enough on defining their ICP.

EDDIE14:10And if they did what they would find, especially when they, like, bifurcate their customers, is, oh, wow. Here are these unique characteristics that when we look at the companies that fit that description, they are much, much more likely or less likely to retain and expand.

RACHAEL14:26Was there anything that surprised you when you were doing this analysis where you thought like, oh, this client was like so easy to get? Surely they're going to be squarely in our ICP. But looking at the numbers, it felt like maybe they weren't where somebody else was that you thought maybe they shouldn't be or wouldn't be.

EDDIE14:44You're asking me, like, was I surprised when I looked at our customer base and found, you know, like, I would have thought this would be a really valuable customer and they weren't, or vice versa.

EDDIE14:55I would love to say yes, because I think that would make for a better answer on a podcast. But no, I think that a lot of the conclusions that I've come to doing this exercise over the last nine years have been kind of I mean, they always say hindsight is 2020, right? So I think these are obvious. In hindsight.

EDDIE15:10I think the first iteration of this was when back when we used to do these like quick one time, like $5,000 implementations of Salesforce for like companies like 2 or 3 salespeople, like we just never saw another penny from them. I think that that kind of made sense to me when I saw that data, it was more just surprising to validate like, oh, wow.

EDDIE15:31Okay, so I have the same level of effort to to land a $5,000 deal as I do a $10,000 deal. But the difference is with the first one, I make $5,000, with the second one I make $10,000 and then another $10,000 on the back end. Six months later when they want to do yet another project because they are not this tiny, tiny, you know, sales team that is so strapped for cash that $5,000 is all the money they can ever part with.

EDDIE15:57And I think we've seen that theme consistently throughout our history as we have moved. I don't even want to say upmarket because we're not working with enterprise companies even today. But just as we've moved to working with more and more mature go to market teams, you know, the folks that have budget, the folks that are committed to like a long term plan, the folks that understand that, you know, fixing go to market is not a six week project.

EDDIE16:20I think it just continues to validate things like that.

EDDIE16:25And it's been interesting. I think maybe there have been some surprises along the way where there are some customers that I thought, oh, this is like a really small customer and they're just using us for Salesforce admin. But a wow, like they kept us for five years. Like that's that's pretty great. You know, like I maybe to answer your question, I think there has a long time been a thought in my mind that like, we don't want to just be somebody Salesforce admin.

EDDIE16:46And then when I look at the data, I say like, wow, these might be smaller companies and they don't have as like sexy of a go to market. And we're not doing the sexy work that we want to do. But like they've kept this around for five years and they've paid us $300,000 and like, they're really happy and we're really happy.

EDDIE17:02Like, why? Why would we not want that business?

RACHAEL17:04I also love how the content we've been putting out in the last year or two has been attracting more prospects to us who are already bought in to the stuff that we talk about and our, you know, our methodologies and ideologies around go to market operations. Whereas I remember before, when I first started working with USC, we would get a lot of prospects that like they they didn't want to do, like the stuff that the work that we typically do, and they didn't believe in the stuff that, you know, we're proponents of, and we couldn't work with them because, you know, we didn't want to take somebody money when we know that it wasn't going

RACHAEL17:41to fix any of their problems, because the only problems they wanted to fix were just like Band-Aid solutions.

EDDIE17:46Yeah. And those Band-Aid solutions, like those Band-Aid solutions, have an extremely high correlation with churn. Right? So when we go in, yeah, we don't fix anything. We slap something together. We charge somebody like, a good amount of money, and then they're like, why hasn't this, like, improved my go to market? It's like, well, we told you that before we started working with you, you know?

EDDIE18:12Yeah. And I think this is the trap that companies fall into is it's really hard to say no to a customer that's trying to give you their money. And I try to think back to my days at Salesforce. And it's just such a weird thing because Salesforce is such a giant company. In theory, they really they don't have a concept of an ICP.

EDDIE18:32You know, when I worked here, they would say, well, these are the companies that are most likely to buy from us, but they would sell to anybody. But even then, like they would, we would push so hard and we had no incentive. It wasn't part of our comp plan. I wasn't comped on churn. Yes. Like I think maybe in the back end, like I wanted the chance to expand the account since I covered existing accounts.

EDDIE18:52So that's one incentive. But we've pushed so hard, like you have to hire an implementation partner, you can't just turn out like build this out yourself. And we would push so our that we would lose customers over it. And I think it's because we knew what's the point of selling this customer if I'm not going to get the expansion opportunity, if I tell five customers that they need to invest in an implementation partner and get this off the ground the right way, and those five customers do that, and then I can expand three of them or four of them, like Salesforce on average with double spend in the first 12 months, then that's more valuable

EDDIE19:25than telling everybody what they want to hear. And then I land five customers. None of them do it right, and then I can't expand any of them. And so I have five times one equals five versus five times 1.8 equals nine or whatever the math is. I can't do the math in my head, whatever. It's more money. So that's what we're talking about here.

EDDIE19:43We're talking about expansion. And I think that this starts at the very beginning. And you and I experienced this where we sat down and said, okay, like our marketing content is not aligned with our ICP. We keep talking about subjects that are relevant for companies that are smaller than those that we're working with today. They're smaller than those that are in our ICP, and it's attracting a lot of inbound leads from folks that are not in our ICP.

EDDIE20:10So let's change our content, and let's start talking about what it's like to run a go to market team. That's 100 $500 million in AR, and they're very different problems to solve.

RACHAEL20:21It's like your podcast with James Roth at Zoom Info. He was talking about, you know, they had to cut out micro SMEs from their ICP. And he said it was kind of like a drug. You know, the micro SMB was so quick hitting, easy to sell. That came in really fast. There was tons of them. It was like easy, quick money.

RACHAEL20:39But then they would churn, you know, a few months later and they would never expand because they were just too small to expand anywhere. As soon as they were able to just cut that out of their ice, to be completely and not go for those companies anymore, their salespeople in the marketing, and everyone was able to focus so much more of the time and resources on the, you know, more ICP companies that would actually expand and not churn.

EDDIE21:02And I think that that's a very common example. You know, it brings me back to your question. You asked me, like, were there any surprises that I found in looking at the data? I think what I would say is the few truly enterprise customers we've had have not been very profitable for us. So I think about I remember there was one customer and I obviously won't name them.

EDDIE21:21And like a true enterprise company, large, large business, fortune 500, etc. and I remember that every single time we would negotiate any kind of an engagement with them, they would just like rake us over the coals, which is, I guess, not uncommon in enterprise. And, you know, they kept like pressing us with we're big, we're spending all this money with you, this and the other.

EDDIE21:41And I just looked at them and I'm like, we have companies that are like 50 million in revenue that pay us more money. Like, why am I bending over backwards to try to take care of you, to earn less revenue than I get from a much smaller company, and also not earn any profit because you guys are so difficult to serve.

EDDIE22:01And so I think for us, we found our sweet spot in the mid market where companies are large enough that they have real needs and staying power, but they're small enough that like, we can have a relationship with the crow and we can do good work and have impact instead of being like six layers removed from the people making those decisions.

RACHAEL22:17So let's say a crow has a solid ICP and a decent customer base. Where do they actually start looking for these expansion opportunities? What's the framework that we use here?

EDDIE22:29So I think the very first thing that you need to do is you need to identify which customers are expandable. Right. And so that does start with the ICP. You know, if we have companies that we have landed that are not in and specifically like the companies that fit a definition that we're going to have a hard time expanding, then we shouldn't be investing a lot of energy trying to expand those companies, at least until we've exhausted other efforts.

EDDIE22:51Right. So you start there. Then within that, you ask which of those customers are healthy, which of those customers went through onboarding? They're using the tool. We can like look and see the data that they're actually using our software or whatever product it is we're selling and they're healthy. And then thirdly, is it the kind of company that can be expanded?

EDDIE23:12I'm struggling to think of examples here. But if, for example, you're selling like a sales tool and a marketing tool and a customer success tool, and they only have a sales team and they don't have a marketing or a CS team, then it's probably going to be really tough to sell your marketing and CS products, right? So you kind of need to narrow it down there.

EDDIE23:31But once you have that, then you have your target list, right? And then this becomes similar to outbound. But I think to answer the question you asked earlier, the reason why expansion is harder is it takes a lot more to get there versus just saying, okay, this is our total addressable market. This is our ICP. We created a list in zoom info of all the companies we want to go after for new business.

EDDIE23:50Let's have at it. You've got to take your existing customer base and narrow it down to this small subset of folks that you can actually sell to, and that may not be as big a list as you would like it to be. Then you want to start looking at opportunities in those accounts to expand it. And that starts with whitespace.

EDDIE24:06So do you have multiple products that you can sell and which companies have which products. And that requires some, you know, accurate data. So you can figure that out. And a lot of organizations don't have that. So now you're back to like an ops challenge of trying to figure that out. And how do you communicate that to the salespeople and meaning, like how do you build a system that gives you gives salespeople that information?

EDDIE24:27Of course, you have like the opportunity to sell more seats or licenses or usage or whatever it is you sell to the existing group of folks that are working with you. And then I also like I oftentimes like to think of stakeholder whitespace. So at Salesforce, it won't surprise you that most of my relationships with my existing customers were with the VP of sales or the CRL, right?

EDDIE24:48So we sell the sales tool to the VP of sales or the CRO. We go in there, the sales team is used in Salesforce. And now you're thinking, how do I get Service Cloud in their marketing cloud in there? How do I get maybe platform licenses for folks that have really unique jobs? Like I had a couple analyst companies that would compete with like Forrester and, you know, they had a large team of analysts.

EDDIE25:08How can I get them on the Salesforce, you know, how do I get finance onto Salesforce, etc., etc.. And those obviously require discussions with different stakeholders in the organization. Great. We've got a relationship with the VP of sales, but we've never talked to the CMO. How do we get a call with the CMO? We haven't talked to the head of customer success or the CEO, who oftentimes, at least at that time, was our decision maker for service Cloud.

EDDIE25:35I had a lot of conversations with CFOs. I think this is massively overlooked. I have a background in finance that was a little bit easier, but I found that like talking to the CFO and then talking about how to restructure their contract upon renewal opened up doors for me to say, look like if you buy more products across your enterprise, if you replace HubSpot with part, and if you replace Zendesk with Service Cloud, I can give you better pricing on Sales cloud and service cloud and part marketing cloud and and and and they would say, okay, well, why don't you talk to the head of marketing, the head of customer success.

EDDIE26:09ET cetera. And then come back to me. And now I've got the opportunity to do a wall to wall deal where I can say, okay, like CMOs bought in, head of customer success is bought in. These are the incentives that I can offer you to sign off on all three of these products at once. So I'm really, really big on stakeholder whitespace.

RACHAEL26:28Everything we talk about on this show diagnosing go to market ops, prioritizing projects for revenue, impact processes, metrics, insights, building a predictable go to market engine. We've built frameworks for all of it. They're free and gated on our website. Mean Square Consulting link will also be in the show notes, so make sure you check that out. All right back to the episode.

RACHAEL26:53So let's walk it back for a second. What does product white space look like in practice?

EDDIE26:58I mean, it's just really simply a list of your customers and who's using which of your products and who's not.

RACHAEL27:02All right.

EDDIE27:04I didn't mean to throw you there, Rachel.

RACHAEL27:06No. It's okay.

EDDIE27:08No, but let me expand on that, right. I think the important point for product white space, if we think about the sermon operations perspective, is it's very simple to understand the concept of like who has what products, but how do salespeople access that information? When I worked at Salesforce, I had all of that, like sitting inside of Salesforce.

EDDIE27:25I could run a quick report and I could have a very intelligent conversation with any of the stakeholders in these organizations about what products they were using, what products that were not using. This is oftentimes not true for mid-market SaaS companies and mid-market B2B companies in general, right? They've got this stored in their accounting system. They got this stored in like their backend system, the power of their product.

EDDIE27:46Like it's not necessarily sitting front and center in front of the salespeople. So if your salespeople are like reaching out, calling folks, like asking them what products do they use? Like, first of all, that's kind of embarrassing. And so you have an operational project on your hands to fix that problem and figure out how do we get the product usage data, or at least the white space data into Salesforce or into whatever system our reps are using to reach out?

EDDIE28:09And the thing that will always tell folks is like, you can crawl, walk, run here, right? It's just like customer health. You can have this massively sophisticated system where you score every usage and like, okay, X number of X percentage of users have logged in the last two weeks and they've got like data in this object and that object and this, that and the other.

EDDIE28:27And here's our complex algorithm and here's our score. And that's great. We're going to integrate our back end database that powers our product and do all this complicated like math. And we'll use AI and all these wonderful things and I'm all for that. But if you don't have time to do that, or while you're waiting for doing that, you could just literally go into your database and say, okay, give me a printout and let's just look at a couple of metrics here, and let's do red, yellow, green and go back to the sales team and say, hey, we just uploaded a CSV into Salesforce, and all of your accounts have a marked red, yellow, green.

EDDIE28:54And now you know, the green accounts are the ones that you want to go after and try to expand. And the red accounts are ones you want to try to get in front of a CSM or have the CSM reach out. Okay, cool. Like here's the Excel sheet sitting on Google Drive that you can look at, and you can see the data that we use to do the red yellow, green.

EDDIE29:10It's not a perfect solution. No, but it gets the job done and it gets it done quickly so you can get out and start making things happen. I would say the same thing about product whitespace. If you don't have that data in Salesforce, you can go and pull that data from wherever it sits. And, you know, run a quick summary and put that Excel sheet, you know, in Google Drive while you're hopefully working with a team like ours to build out a proper solution in Salesforce so your team can have access to that data.

EDDIE29:37But you don't need to be delayed by six weeks or six months, or however long it takes to build out that that integration so that your team can actually have intelligent conversations with your customers. Is that a better answer than the first off the cuff quick answer I gave you?

RACHAEL29:50Yeah, a little bit a little bit more fleshed out. So a lot of companies at this stage are already doing some version of whitespace analysis, even if they don't specifically call it that. But what do you see teams miss when they think they've already mapped out all of their expansion opportunities?

EDDIE30:06Okay, this is a great question because my first reaction to that was nothing like you've mapped out all of your expansion opportunities. You know which accounts are healthy, you know which accounts you can expand, you know which accounts have what products. The missing piece is consistent execution, right? So if we go back to our go to market efficiency pyramid, which is like right on our frameworks page, and we look at the adoption piece like okay, like, well even before adoption fundamentals like okay we've identified these accounts.

EDDIE30:34What is our process? Do we reach out to the CMO five, ten, 15 times over the next month or quarter before we give up? If they don't respond? Do we ask the VP of sales for an introduction to that CMO? Do we put them in our mailing list and we send marketing emails to them? Hopefully they've opted in if we're doing that.

EDDIE30:56Like, do we put them in a nurture campaign? Like what is our actual process to try to convert that, that stakeholder or that company into that white space? Then when we go to adoption, are we driving that adoption? Do we have reports? So for example, I'm a big fan of just having like an account report that shows like what stage an account is in on the new business side.

EDDIE31:20Right. So we have an account that's marked like new working, replied engaged, etc. and we can even automate this if we've sent them an email and they've responded and booked a meeting. Like we can have automation update the account to engaged and we can see, okay, we have these 1000 accounts we're trying to go after and 200 of them are engaged and 100 have an open opportunity and 700 of them are working and only 100 are are new okay.

EDDIE31:43The same can apply across our existing customer base and across our existing stakeholders. Right. So we could look at every CFO in our existing account base. And like have we reached out to them? Have we booked a meeting with them, is there an open opportunity with them, etc., etc.. And we have to think about how do we drive our team to execute the behaviors that we know are going to be necessary to expand these accounts?

EDDIE32:08Now, when I was at Salesforce, the process that we had for new business and at existing business was pretty much identical. So like the metrics weren't complicated, it was how many activities did you log every day? How many meetings did you book every day? How much pipeline did you generate every day? Slash slash quarter and how much did you close and win?

EDDIE32:29It doesn't need to be complicated, but if you're looking at your existing account base and you're seeing no activity, no meetings, no pipeline generated, then obviously like your team is not executing consistently, if you're hitting all of those, then your team is executing consistently and they're not leaving anything on the table if you're somewhere in the middle. I'm a big fan of reading from right to left.

EDDIE32:49Okay, like, are we closing enough business in our in our existing accounts in terms of expansion? No. Okay. Are we generating enough pipeline? No. Okay. Are we generating enough meetings? No. Okay. Are we generating enough activity? No. Okay. Like we need to have a talk with our sales team. Either way, we need to have a talk with our sales team on where that's breaking down.

RACHAEL33:06So going a taking a bit of a different direction. Do you think about expansion differently for a company selling a platform with multiple products versus a company with a single product and just see based pricing?

EDDIE33:17Yeah, absolutely. I mean, I think expansion is extremely dependent upon the product. I think at Salesforce they had a seed and grow motion where, you know, you go in and you land, you know, the sales team or you land one sales team and then they're happy with Salesforce. And then it's easy to expand to the other sales teams.

EDDIE33:36And then you expand to the marketing team and you expand to the customer service team or customer success team, etc.. I worked at a company called Alva, which sold a version of Salesforce for private equity, and it was almost impossible for us to expand those accounts because the use case was they would use Salesforce for fundraising and sourcing investment opportunities.

EDDIE33:56And so they have maybe 1 or 2 people that do fundraising in the private equity firm. You either have those people as users or you don't. And then they have maybe a few folks that spend a lot of time and effort going and sourcing deals. And you either have those people on the platform or you don't. And I actually was the only job I've ever had that's been new business only.

EDDIE34:15And I asked my CEO, like, why aren't we calling existing customers? And I think that was part of the problem. Like we didn't have a second product to sell them at that time. Now they do. Now they have tons of products, right? That was the first AI there. So that was tough. And on top of that, like most of our customers, they were already kind of like bought in on the whole the whole bag.

EDDIE34:33In theory, I could have called like a certain number of customers and said, okay, you're using fundraising. Do you want to use like deal sourcing and vice versa? But we also had a small number of customers. I think we had like ten, 20, 30 customers at that time. I mean, this is like $1 million startup when I joined.

EDDIE34:50So I don't think it made a lot of sense for me to be like hammering 30 or 40 phone calls a day to our 20 existing accounts, especially when we didn't have a second product to sell. So yeah, it depends immensely on what the product is that we're selling. And, you know, whether or not there's a second product to sell, whether or not there's a lot of opportunity to sell more seats, or if we're on usage based pricing, like, is there something that we can do to drive more usage?

EDDIE35:15It's highly dependent upon the product and the customer.

RACHAEL35:18So what signals in customer usage data should trigger an expansion conversation?

EDDIE35:23I think this is also extremely dependent on the product and the customer. But I'll use some some examples here. So I'll go back to Salesforce. And the reason I use Salesforce as an example is just everybody can relate to it. Everybody understands what Salesforce does and you can kind of understand it as opposed to like citing one of our customers where they might not be familiar with the company or the product.

EDDIE35:41And also like for privacy reasons, we can't always, you know, always share everything that's going on with our customers. So, you know, when I looked at like, customer health data, the first thing I wanted to look at is how are they using our product. Right. So you could see the the percentage of users that were actually logging into Salesforce, like within the last two weeks, you could see metadata on how many accounts they had, how many contacts, how many opportunities, how many leads, how many activities, etc., etc..

EDDIE36:11Right. And what I could do with that is I could infer some things about how they might be using the product. So for example, if they had like a bunch of accounts and contacts and maybe like a million opportunity or sorry, a million activities, but they had no sales opportunities, then I could make the assumption that marketing was using Salesforce to send out a large number of emails.

EDDIE36:32That's the only way you're going to get to a million activities with a small sales team. And since there are no sales opportunities, the sales team is actually not using Salesforce. So now that informs my talk track with both marketing and sales leaders on how they might be using Salesforce and what they might be missing about it. So that's one example of the way that I would look at usage.

EDDIE36:54The second example would just be red, yellow, green. If you know they've got 50 users on Salesforce and 45 of them haven't logged in in two weeks. That's a red account right there, right? If they like, don't have any accounts or contacts or just any records in Salesforce, like that's another red flag right there. And maybe they have 100,000 accounts and contacts in Salesforce, but no activities and no opportunities and no leads.

EDDIE37:27Then you're like, okay, what they probably did is they probably uploaded 100,000 accounts to Salesforce for their 30 person sales team. I don't know how 30 people are supposed to call 100,000 accounts, and it's probably a complete hot mess, and I probably need to have a conversation with the VP of sales on how they need to bring in an implementation partner to clean up Salesforce, and I can make a lot of assumptions just based on that metadata.

EDDIE37:51But this is so highly dependent upon, you know, each individual product and how it's being used. The company I left after Salesforce is called mid, and it was a trading application for Wall Street traders of credit. And we were looking at that data and we were just trying to figure out like, does this trader that have an interest in these types of securities?

EDDIE38:12Is that person going into the room with the trader on the other end that also has an interest in these same types of securities? So it's a very, very different problem that we were trying to solve for. And that became like a big data data science issue. So yeah, I think that's as much as I can say on that question because it's so dependent on the product.

RACHAEL38:31Yeah. And I you know, I feel like so much of this is so dependent on the product. And so there's not going to be like one specific playbook that every company can use for optimizing their their expansion motion. But how should companies be, you know, approaching the creation of this process and, you know, also adoption of it and making sure that, you know, the people who are supposed to be doing this are doing what they should be, and also who's who's owning this, like, who should be analyzing all of this data and working these accounts.

RACHAEL39:04Is it sales is the case. Is it a combination?

EDDIE39:07Yeah. I mean, I think there's a lot of people that should own this. Right. So let's start with that question. Then I'll get you next question who should own making this work and analyzing the data. So the first person is obviously going to be whoever is in charge of customer success or specifically like the account executives or account managers that are carrying a bag and responsible for expansion.

EDDIE39:28If that person reports to the crow, or if those people expanding accounts report to the crow, or just if there is a crow, period. The crow should own this as well. I believe the CEO should own this. I like to this day cannot understand why any CEO would not own go to market. Ultimately, it's obviously such a massive part of the business.

EDDIE39:49Some argue it's the only part of the business and then obviously rev ops as well. Like if I'm a VP of Rev ops in an organization and I'm not looking at this data, I don't I feel like I'm not doing my job. So I think all four of those individuals should be looking at this data closely every single day or week or month, and trying to figure out how they can optimize this in terms of how they do that.

EDDIE40:11It is dependent upon the product and the customer at a granular level, but at a high level, it's all the same stuff. If people go to our go to market efficiency pyramid, we've broken this down for renewals and expansion. And if you give me just a second, just so I can make sure that my memory doesn't fool me, I will pull this up and I'll go through this really quickly.

EDDIE40:31One second is I pull this up and folks can find this on our website under our go to Market Efficiency pyramid, version three.

RACHAEL40:40I should be able to have like a sound button that just plays like little elevator music or like the TikTok music.

EDDIE40:49If it didn't take so much compute power to try to run these calls. All right, I'm almost there. Okay, so, you know, we start with the fundamentals, right? So we've talked about ICP and personas. And these need to be defined by product. Right. You might have multiple products where a certain type of customer is just never going to buy that given product.

EDDIE41:07And so why would you expend energy calling into them. But if you don't think through that, it's entirely possible that you build out a system and a workflow where your reps are reaching out to these companies and then realizing there's no way I can sell this like second product anyway, then you need to define the expansion process. And that's obviously like pretty generic.

EDDIE41:27So let's get into what that means. I think it's really healthy to do a customer journey map. At what point like so we take the customer all the way through the new business journey and then they've signed a contract. What happens next? What does the sales handoff look like? What is onboarding and implementation look like? At what point in time should they be healthy?

EDDIE41:43Does it take, you know, six hours, six days, six weeks, six months or six years for them to become a healthy customer?

EDDIE41:51Account scoring and assignment? I skipped one capacity and territory planning. So we're really big on capacity planning here. If I tell an account manager, hey, like, here's a thousand accounts that you need to to own. Or when I worked at Wells Fargo, my first job out of college, like I had 4000 accounts to cover existing customers. Just like there's no way that I could ever call those customers, right?

EDDIE42:14So if you think about a capacity plan, like, okay, if I'm going to make 20 calls a day and I'm going to call each, you know, key stakeholder ten times before giving up, and there's five stakeholders in an organization. Well, then you can do the math and you can figure out how many accounts can my account executive or account manager actually cover in the year that they're assigned to that territory?

EDDIE42:34Then we can define the territory so that they actually have the right number of accounts, and we pick the best account. So we say, okay, like you can only cover so many accounts. So we're going to identify which accounts those are and give you the best chance of success at converting those. This might apply if you have like a full time account executive or account manager.

EDDIE42:55That's quota carrying and that's their only job. You need to make sure that you have enough of those folks to run expansion. If they're covering new business and existing business, you have to think like, well, how much new business do we want them to do? How much expansion? I'll tell you this, like every job I've ever had, where I've been in that position, I'm calling existing customers before.

EDDIE43:10I'm making cold calls. So really important to do a capacity plan if you really want to optimize both new business and expansion. And if they're also supposed to be the CSM, which is probably not a good idea, then you really need to map out how much time they have to prospect into these accounts. The next piece is going to be account scoring and assignment.

EDDIE43:30Right. So what methodology are we going to have to assign these accounts to reps and to score the accounts and say, look these are the best accounts for you to expand. And this is something we talked about a lot at Salesforce is like, okay, let's look at who's spending the most money. That's not necessarily the best company to expand.

EDDIE43:45Like they might have just bit off like the wall to wall, five year wall to wall deal where they're spending like on the penultimate Salesforce licenses. They're called like Ultimate or Platinum or whatever they're called these days. And they just signed off on that for every single employee in their company. Well, you're not going to expand that account.

EDDIE44:04There's nothing left to sell them. Right. So we need a way to score those accounts. It could be a simple way, but we need a way to score those accounts so that we can help our reps identify the best accounts to to target. And then we need our account sequencing process. Or are we going to reach out five times, ten times, 15 times over email, over LinkedIn?

EDDIE44:24Are we going to like walk over to their office because we're local and knock on the door? Like, what is our process? We're trying to expand these accounts. I think it's really important to map that out. And like, when do we give up on that? And again, it doesn't have to be complicated. Even at Salesforce, when I was a 5 to 10 billion, when they were at 5 to $10 billion in revenue, the process was basically like, here's the eight stakeholders that we go after.

EDDIE44:44And it probably behooves you to call them like 5 or 10 times before you give up. And here's how we track that. And that was about it. It really wasn't that complicated. Here's the research that you should do before you go and like, write the email or make the phone call to reach out to them, this is what you should know about the account, etc. but we had all that stuff mapped out.

EDDIE45:04And then lastly we talked about product and stakeholder whitespace. So having that mapped out, having a report that says like here's all of our customers, here's what products they're using, what products are not using. And it's really helpful. Like here's all of our customers. Here's the stakeholders we've met. Here's the stakeholders we haven't met that can really help with like who you might want to reach out to.

EDDIE45:24So those are the fundamentals right. And those are key to building out the expansion process. And then you have to drive adoption. So you have to train and enable the team. You have to have the right reporting and dashboards in place like okay, if you want the route to make ten calls to every CMO and your existing accounts, do you have a report that shows that they made ten calls to every Kemo in your existing accounts?

EDDIE45:45Not rocket science, but you need that report A and B you need a regular cadence of management review. If it's really important to make those ten calls to every CMO, does frontline management have a regular cadence where they review those reports and say, hey, Bob, like I noticed that you called all these MOS once or twice and then gave up and moved on to other things like, how come you really have to decide?

EDDIE46:06Like what behavior do you want to drive and what execution do you want to make consistent. And those are the biggest things. And then from there you can get into optimization and looking at these metrics and seeing what's working and what's not working. Testing, messaging, having a go to market council meeting and then amplifying with automation and AI, as we've talked about exhaustively.

EDDIE46:24But those are the things that we need in order to like get our expansion engine working.

RACHAEL46:28So what is the fear or the risk of annoying your good customers? If you're saying we need to contact these guys ten times, 20 times, or ever long.

EDDIE46:41Call man, I had a lot of experience annoying people at Salesforce. I think a lot of people can identify probably everywhere, but Salesforce made it really. Salesforce made it really easy. I mean, I think like Salesforce kind of embraces the concept of annoying their customers, right? And they can get away with it because they have a really sticky product.

EDDIE46:59So somebody signs off on Sales Cloud and they're on a three year contract or even a one year contract. They spent all this money on implementation. Their entire sales team is using it. I could easily, as an account executive, like calling into the VP of sales and like piss him or her off and no big deal. So I think this is highly dependent upon the product and the customer and the stickiness of that product.

EDDIE47:19Right. We are not in that luxurious position today at Union Square Consulting that I can afford to call my customers and piss them off. So I think that that's a really important point. Right. And I think that you have to strike a fine balance of like, hey, like I'm reaching out for a reason. I have a point of view, even at Salesforce, even with that luxury, you know, a lot of reps are calling like, I'm your new rep.

EDDIE47:43They're like, great, your rep number 15. Like, I don't want to talk to you. Like, please don't ever call me again. That's not good. Right? And I think we all kind of at least we're trained in theory to not do that and come with a point of view and say, hey, like Mr. and Mrs. VP of sales. Crow, I know I'm your 15th rep when it introduced myself, but in addition to that, I've been looking at your account and I have some ideas for you.

EDDIE48:07I think that this could work better or that could work better. Or you might want to think about this or that, and even then that's going to be annoying. Like, I find this myself, even when I call our existing customers, if they, like, have this, like radar that Eddie, Eddie's trying to sell me something. It doesn't matter that I'm the CEO and founder.

EDDIE48:26They still are like, can I just talk to Jerry, who's not going to try to sell me something? And that's why I think it's really important to have like a CSM. That's not the quota carrying person that is responsible for expansion. I think it's a really good idea to have a CSM that's like, look, I am here to help you and help you get success on this platform and get usage out of this platform, not to try to sell you something.

EDDIE48:49And then the account executive or account manager can be like, I'm the person here that's here to open your eyes to new things that you could do on our platform. And I think that's always going to be a little bit annoying to people. And you got to find a way to strike a balance.

RACHAEL49:03Yeah. So how should that handoff look like between customer success and sales once an expansion opportunity is serviced?

EDDIE49:11Well, I think a lot of times it's difficult to get customer success to originate those expansion opportunities, right. If they're having a natural conversation and something comes up, it's pretty easy to just create an opportunity in Salesforce and or, you know, slack, the AEM and say, hey, like, we've got something and this person wants to talk to you.

EDDIE49:31But I think it's really tough because CSM are so oftentimes just trying to solve problems. And the customer is on the phone with the CSM not to be sold, but because they want to solve their problems. I think what's more important is that the AI or Am is set up for success in the sense that the account is healthy.

EDDIE49:47They have the data to understand what's going on. Okay. Like this company is using these products and they're using them. Well, we have this stakeholder white space. And now I can proactively reach out to somebody and say, hey, Mr. Miz, CMO, COO, CFO, head of CS, etc. I'd like to have a conversation with you about how we might be able to help you achieve your goals.

EDDIE50:08Here's what I know about your account, here's why I want to talk to you, etc. I think the reason that we have salespeople is that it's easier for them to open doors like that, and the reason we have CSM is we want them to build trust with customers, and we want those customers to feel comfortable that they can just be open and honest and say, this is what I'm struggling with, without it always turning into a sales conversation.

RACHAEL50:29On that vein, how do we talk about Covid incentives? Because they're still needs to be some kind of incentive for, you know, salespeople or maybe even CS, like, they're not maybe not directly incentivized to sell, but something that gets people, you know, foundationally looking for these opportunities.

EDDIE50:50I mean, it's interesting because, like, I'm going to say something that I realize I don't do this myself, but for various reasons, there's always exceptions to every rule. But I would say in general, if I was running a different company and I had one sales person and one CSM, I would make that CSM solely responsible for retention and customer health, CSat, NPS, etc. and I would say it is your mission to make these customers happy and successful on our platform, and I will provide you every incentive and measure you on every metric that's associated with that.

EDDIE51:23And I would have my one and only sales person cover new business and existing business and have a quota and carry a bag and be responsible for expanding those accounts. I will say that like, I don't actually do this in our business just because Jerry is amazing and he builds so much trust with our customers and he has so much context, but we're also in a service business.

EDDIE51:44And so like the product that our customers are using is talking to Jerry and the rest of our delivery team. And so they just have so much depth that it's a lot easier to introduce a conversation as to why they might want to expand their footprint with us in the middle of that conversation. So that may be like the reason that there's an exception for us, but I think it's just really hard.

EDDIE52:08And I see this with Jerry as well. Like he doesn't want customers to feel like he's always selling selling them something. And he genuinely wants to help our customers succeed. And so that always comes first, right? And so I think it's difficult for CSM to juggle that. Jerry does a good job of it, but I don't know that that's necessarily the optimal structure for other organizations.

EDDIE52:29So yeah, like my answer is I wouldn't go to a CSM normally and say, hey, like especially a team of CSM and say, you know, you're responsible for expansion and here's your quota and your commission.

RACHAEL52:40Yeah. And shout out to Jerry also. He's amazing. He's great.

EDDIE52:44Yeah. People love Jerry. That's another reason why he does is it's like our our customers love Jerry. So you know.

RACHAEL52:49Yeah. And if anyone's listening to this now and you feel like one day reaching out to talk to us, you'll probably be talking, Jerry. All right, so what does what role does Rev ops play in making all of this collaboration work.

EDDIE53:01So let's say like we've got The Crow and had a customer success in a room. And they're trying to figure all this stuff out that you and I are talking about. Right. If you have a very talented and experienced VP of Rev Ops, they can do a lot of this for them. They can say, okay, like, let's go figure out ICP.

EDDIE53:18I've got some let's, let's imagine this VP of Rev Ops is like on our team or otherwise just new to the organization. And they come in and they're like, I don't know anything about this company. The customer is a product. Like I can ask really pointed questions about the ICP and define that. Now this makes this a lot easier for the the crow and the head of CS, because they just need to answer some questions.

EDDIE53:39What's our ICP? Who are the customers that are easiest to serve? Easiest to expand? They can go look at that data and try to reverse engineer it right. What are the buyer personas and the stakeholders that we should be, that we should be talking to. And they can literally go and build out this process, but they need feedback from the crow and the head of CS in order to do this.

EDDIE53:59Without that VP of rabbi ops or somebody who is more junior or more reactionary, you can of course have somebody like build out Salesforce and Service Cloud or Zendesk or whatever you're using for these, these systems. But you have to have somebody that's going to think strategically about this. You have to have somebody that's going to think like, who is the customer that we're trying to expand?

EDDIE54:20How do we know if they're healthy? Who should we be talking to in the account? How do we assign territories, how do we assign each account to each rep, etc.? What's the capacity plan? And what does that step by step process that we need to build out? And then what tools are they going to do that step by step process?

EDDIE54:38If they're going to reach out ten times to the CMO, are they going to do it in Salesforce via Gmail? Are they going to do it in outreach or sales loft or Apollo? What tools are they going to use? Where's the report, etc.? All these things need to be decided. And if you have a talented, senior, proactive, prescriptive VP of Rev Ops, they can do 95% of that work.

EDDIE55:02With just some feedback from the CRO, head of CS and some data and talking to the, you know, the people on the front lines. Of course, if you don't have that, then that means the crow and the head of CS need to do that job themselves, and they need to do all of that heavy lifting that the VP of Rev Ops would otherwise do.

EDDIE55:18And I know that that's a veiled pitch for what we do here at Union Square Consulting. But it's just a simple fact like this is a job that needs to be done and somebody's got to do it. I'm not saying the crow or the head of CS is incapable of doing it, but it's a lot of work that needs to be done.

RACHAEL55:34And how is AI or advanced tooling been able to change the way that we do that work or approach expansion?

EDDIE55:41I think AI creates such an infinite number of opportunities here, but you've got to set the foundation right. So let's talk about our ICP and our our personas. If we don't have our ICP in our personas, we can't go in and tell the AI like, go write me an email that we're going to send to like the CMO, because we're just going to be targeting the wrong accounts.

EDDIE56:03Now, to the extent that we can use AI, we can go in and say, like, let's take a look at our existing accounts, let's get the right data, let's fit into the AI, and let's ask the AI who are ICP might be, but even then you need some foundational knowledge of like, well, what data are you feeding it?

EDDIE56:19What things might be important? Do we have, of course, the company name, do we have revenue? Do we have revenue growth? Industry subsector fundraising, what roles like etc., etc., etc.. Product usage. If we feed all of that into the AI, potentially the AI could help us identify the ICP and the buyer personas byproduct, but we have to feed it the right data in order to come to the right conclusions.

EDDIE56:45If our ICP is, in fact companies that have raised large rounds of funding and we don't feed that into the AI because we haven't thought about it, then there's no way that the AI can just magically come to that conclusion, right? So I'm a big fan of using AI where we can to build the fundamentals, but oftentimes, like we know, like if you have a head of customer success that's been there for five years, they probably have a pretty good idea of who the ICP is.

EDDIE57:11We can then run reports and find out, like how to validate that same thing with the process. Like we need to map out what that process is, and we can use AI to validate that process. Like you had Kyle Norton on on the show, and he talked about how they redefine their sales process by using AI to score calls.

EDDIE57:30But as Kyle mentioned, like at least from what I heard or what I took away from that podcast, they weren't starting from zero. They didn't just have this massive a process and they just slapped AI on top of it. So I think AI is something that can work really well. Once you've built the foundation and you've got like the basics in place and your team executing those basics, but it's hard to just bring it in and say, like, I expect AI to just be like the one stop solution to everything.

EDDIE57:54We have a hot mess. We're just going to feed this into AI, and it's going to spit out like the perfect end to end, you know, expansion sales process.

RACHAEL58:02Yeah. And if anyone has spent any significant amount of time using AI, you know that it's not always right and you know you can't.

EDDIE58:10I think it's everybody at this point, by.

RACHAEL58:12The way, it should be everybody at this point or it's going to be soon. But yeah, like you need a human overseeing all of this stuff, even once you get to the point of using a lot of AI for amplification, like it's never just going to be like, hit a button and, you know, everything is done for you.

RACHAEL58:30Somebody needs to look at that and make sure it's actually done correctly.

EDDIE58:33Exactly. Like, how do you know when it's hallucinating if you don't know what good looks like, right. Like if we haven't sat down and thought carefully about what a customer looks like, that we have a good chance at expanding and then we feed into the AI. And the AI says, okay, target these accounts with this type of messaging, etc., etc. and we just go and then we don't get the results that we want.

EDDIE58:51Is it because the messaging was bad? Is it because we were targeting the wrong customers? We're back to square one trying to answer these questions. If, however, we've done that and then we look and we say, oh, well, like, you know what, I think this was the right account, but the messaging isn't working. Let's tweak the messaging.

RACHAEL59:06And AI can be very confident in the answers it gives you. So you you won't know unless you, you know, already have that knowledge to be able to review it and be like, oh, I know this looks wrong.

EDDIE59:18Yeah. Well, and I think the frustrating thing is, is like, none of this stuff is rocket science. I think a lot of people in the organization know the answers to these questions. But here's the problem. You've hired a new account executive or a new account manager, and they come in and they go through training, and now they're like in month two and they're picking up the phone and they're trying to call customers or email them or DM them on LinkedIn or whatever, and they don't have that institutional knowledge that the CEO or the Crow or the head of CS that's been there for 5 or 10 years has they could have that if somebody just

EDDIE59:51wrote it down and included it in training and reinforced it and put it into the systems, but they haven't done that. And so this person is now wasting time, not because there is this mysterious thing that nobody knows, but because this very obvious thing that somebody has in their head is not translated into like a repeatable, executable process.

RACHAEL60:12All right, Eddie, we were coming up on the end of the podcast here. I just have one final question. What's an example of a company that you've seen do expansion really well without naming names? If you can't, or maybe you can, but what are they doing that it just seems to be really working, or maybe something that others aren't doing.

EDDIE60:29Well, I hate to go back to this example, but I think like just by definition, when I worked at Salesforce, with their ability to double spend within the first 12 months, like I think they hit the bar, at least at that time, for a company that had this really dialed in. And the reason they had this dialed in is number one, I think as much as like we didn't really have a defined ICP, I think that they spent money on marketing.

EDDIE60:56And in terms of cold calling and all of our efforts to try to acquire customers, I think we're pretty dialed in in terms of trying to attract customers from the industries and the segments that were most likely to stick around. That's part one, right? Sure, any random company could have gone to our website and come in as a lead and we would have then worked them, but by and large, I think we were really focused on the industries where we had the most success.

EDDIE61:23Secondly, I think we qualified them pretty well. So from the stars to the lows, etc., I think we did a really good job of telling them like, this is something that you need to commit to. No, you're not going to buy Salesforce and have it working tomorrow. Yes, you have to hire an implementation partner. Yes, you have to spend thousands or tens of thousands or hundreds of thousands of dollars in order to implement this.

EDDIE61:45Yes, you should probably sign a multi-year contract. No, you can't buy salesperson. Just switch in six months. Now you can't pay us like monthly. Like you have to be committed to this. And I think that set a high bar for a lot of organizations. That really increased our chances to expand those customers. Now, Salesforce isn't perfect. I had a lot of unhealthy customers, a lot of people that really hated the customer experience, but I think they have a really sticky product, and I think they set the bar high enough that most of the companies that I interacted with made a reasonable, at least financial investment, if not time investment in trying to make it work.

EDDIE62:20And that enabled us to then go in and run the playbook that I've shared on this podcast, which was, okay, now that we've got them healthy, like we've got it dialed in, we know what the process is to get them healthy. We get them in front of a certified implementation partner that we trust. We get them to get things working.

EDDIE62:37We check the, you know, the health metrics and we see that it's working. We step in if it's not, and then we get them to a healthy point. And now we think, okay, what other products can we introduce and what other stakeholders should we start building relationships with? I think that playbook was pretty dialed in and worked really, really well.

EDDIE62:52And I think if somebody's listening to this and they're saying, well, I don't have the same product, that Salesforce has the same stakeholders. ET cetera. You just think, okay, how does this apply to my business? To what extent do we have multiple stakeholders that we could build relationships with? To what extent do we have multiple products? We can we can sell?

EDDIE63:08To what extent can we grow the usage of the product that we have, whether it's more licenses, usage based pricing, more usage, etc.. And then what is the play? What do we need to do in order to do that? And most of the time, someone in the organization knows the answer to that. The problem is oftentimes everyone in the organization does not know the answer to that, or at least everyone on the sales team.

EDDIE63:28And that's the gap you have to fill, taking the information that's in one person's head and putting it in everyone's head so that everybody's running that same playbook.

RACHAEL63:36What a great place to leave it off. All right.

EDDIE63:39Cool. And then if anybody wants to check out the go to market efficiency pyramid, you can check it out at Union Square Consulting Frameworks. And we will eventually create a framework specifically on expansion. There's already a pyramid in there in the go to market efficiency pyramid framework that covers specifically expansion. But on top of that, we'll write out a whole framework just on expansion at some point.

EDDIE64:01So if you're listening to this reasonably like later than the published date, go back to that same page, Union Square Consulting Frameworks, and you can find it there.

RACHAEL64:10And that pyramid framework will also be linked in the show notes.

EDDIE64:14All right. Awesome. Thanks for putting this together, Rachel. Of course. Thanks for listening to the episode. If this resonated, please give us a five star rating and a follow. It helps us reach more people, and you get our latest and greatest content without having to search for it. And if you're looking for hands on help and go to market strategy and or rev ops, please reach out to us.

EDDIE64:31We help our clients with everything from annual planning to improving processes and go to market, implementing systems to support those processes and go to market AI. We're always happy to offer a free consultation to help you identify the best opportunities to improve your go to market engine, with or without our help. You can find us at Union Square Consulting and the info will be in our show notes.

Optimizing Customer Expansion for B2B SaaS

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