6 ms·

I think this is a particularly rose-tinted glasses view of the sales process, which sells underquoting as a great thing for your customers that they will love (

by Closi 4y ago

I think this is a particularly rose-tinted glasses view of the sales process, which sells underquoting as a great thing for your customers that they will love ('When you tell them they need to pay more, they will love you and will recommend you to others!'). In reality, 'land and expand' is almost universally hated by customers and this just appears like an excuse to under-quote to win the commercial point on an RFP and then screw the customer over when there is some lock-in later down the line. How about neither of these - how about selling solutions that you honestly believe are right-sized, being transparent about the sizing/requirements assumptions you have made, and then being flexible contractually if reality turns out different? This is how you actually build trust and consumer satisfaction, not by deliberately underquoting.

mox1 4y ago
Yea, at my F500 sized company we set budgets year(s) in advance. I literally have a line item (that gets reviewed monthly!) for each major SAAS product my team uses. We estimate like a 5% inflation YoY into these budgets. If a vendor purposefully under-quoted / undersold me and then asked me to pay more $$ 6 months in, I literally couldn't do that if I wanted to.
- Rastonbury 4y ago
  Expansion and addons are really common though, the stakeholder has to push for more budget, not too difficult if the product really drives business value
  - jjk166 4y ago
    There's a big difference between compounding past success and ameliorating past shortcomings. If implementing some improvement goes well, we accomplish our goals on time and within budget, it's easy to say let's do it again. If a vendor makes me go in front of my boss and say the budget I previously requested was not sufficient and the thing I said would get done wasn't, I will never stake my professional reputation on that vendor again.
  - Closi 4y ago
    This isn't about selling customers what they need, then discovering new value through addon's though. The article is quite clear that it is intentionally selling a customer less than what they need in order to get them to buy what they actually need later down the line, once they are already committed. As a simple example, I could sell you a 3-year software license agreement with a 60 day estimated implementation program on a T&M basis. Then after you have signed the software agreement and are committed to licencing we go into blueprinting, I could suddenly say that it's actualy 120 days implementation now, and that will net the vendor an extra $90k revenue in Y1. Then after implementation you realise that you didn't buy the 'Bi-Connector' that was demo'd to you during the sales process because "oh that's actually another license" even though they clearly showed it as core functionality in their demo.
    - Foobar8568 4y ago
      I am dealing with such in different clients, fuck them, fuck these people. Even worse, you are taken hostage to their sales team,what can you do? Break the contract? Penalties when you barely have a working solution? Bring the legal team? Yeah sure, good luck to have anything completed.
- jehb 4y ago
  Came here to say this. I'm sure there are situations where this strategy may work, but where I've worked (which is primarily outside of line of business operations) budgets can be inflexible in the short term and just as often trend downward as upward. And people move on. Just because you developed a business justification with my the person who owned a budget before me doesn't mean I'm going to identify that need as a business priority, particularly if my first interaction with understanding that piece of our operations is that it requires a ballooning cost allocation.
- aaaaaaaaata 4y ago
  Do you have a discretionary budget?
  - mox1 4y ago
    Yes, but I wouldn't be allowed (or I would be questioned) why I wanted to use that budget on this addon/upcharge. We can always fight to get more $$ (there's always money in the banana stand!), but I do have to put myself on the line to do it, justify the need, etc. I would never do that for a vendor 6 months into a new relationship.
- Mandatum 4y ago
  That’s why we usually tie you into a 2 year contract with review points for expansion and adjustments, with looots of discounts up front. By year 5 you’re paying sticker price and paying our consultants for integration and Enterprise feature configuration.
safeimp 4y ago
> In reality, 'land and expand' is almost universally hated by customers Honest question but do you have any source for this or is it primarily your personal experience? In my experience land and experience has been leveraged to help get a foot in the door sooner than later, it was never anything more than that. If we had the ability to walk into a shop and start with 100% of the clients environment we'd have done that but the problem was typically tied to the customer not being ready to rollout from 0-100 overnight. For us the best approach was to start small and work with the customer on gradually rolling out as they were comfortable. Regarding your other point: > How about neither of these - how about selling solutions that you honestly believe are right-sized, being transparent about the sizing/requirements assumptions you have made, and then being flexible contractually if reality turns out different? This is how you actually build trust and consumer satisfaction, not by deliberately underquoting. I'm in complete agreement, this is the best case scenario and is certainly the best way to build long-term trust and relationships but universally it doesn't happen or when it does it's not transparent. The customer really has to push to make this happen only leading to anxiety, relationship damage, etc.
- nickstinemates 4y ago
  > If we had the ability to walk into a shop and start with 100% of the clients environment we'd have done that but the problem was typically tied to the customer not being ready to rollout from 0-100 overnight. On top of that, there's a handful of people, maybe less, who actually have the juice to be able to make this happen even if they wanted to in any given organization. You're likely not talking to them. Teams who need to get shit done today and are ready to roll out are much quicker to transact and less of an organizational risk (time to value vs. contract amount)
- thaeli 4y ago
  I think you may be talking about two slightly different things. Land and expand in the sense of "land a small, right-sized solution for one group within a large company, then leverage that successful deployment to expedite expansion to other groups, and maybe eventually convert to an enterprise agreement" is great, and often the only way to get in the door at a large org. From the org's perspective, being able to adopt an "existing" solution/provider is often much faster and can even skip some RFP processes. I don't think anyone is saying this is bad. Land and expand can also mean "deliberately undersell/underbid on a large RFP, take an initial loss, then as soon as the customer's locked in slap them with large change orders and annual increases". I don't think I need to elaborate on why this is scummy. The article isn't very clear about which scenario it's advocating. In the simple case of per-seat licensing, I've seen it both ways. From the customer's perspective: If we're looking to buy your product, and say hey, this has some long-term upside, we think it might be used by 500 people within two years, but our initial group is 20 - that's an undersell of sorts. Typically the concessions we would be asking there are less around unit license cost and more around waiving migration/setup charges or sometimes even negotiating a new license category/SKU. (Hey we use 50 seats right now, we'd like to buy 200 more but they're only going to use this one new side feature you implemented, let's find a discounted rate to only license that feature. It's an ethical undersell because it was done with the customer fully aware.) But I've also seen some groups get stuck with the reverse. Sales promised them that oh yeah, this tier will work for you, and then hit them with massive usage-based overages. That's "land and expand" too, but it's scummy.
throwawaysleep 4y ago
"hated" doesn't matter unless customers actually change their behaviour. Companies will get screwed over on low cost RFPs again and again and again and do nothing about it but whine. Customer satisfaction only has value if it drives additional sales, but plenty of orgs do not care. Accenture and IBM have been doing this for decades. They do it because it works.
waynesonfire 4y ago
I have never seen anything remotely to your ideal. Did you forget how competitive and cut throat the world is? You don't sell, you don't eat. Sales is a race to the bottom, a competitor will eat you alive by undercutting or over-promising just the right amount to win the deal.
- deleted 4y ago
  [deleted]
- Closi 4y ago
  It probably depends on both the market and the cultural landscape. I'm in the UK, and USA providers are more 'cut-throat' than domestic UK providers in my personal experience when I have tendered enterprise software in the past, and the cultural differences have been massive. Cut-throat is fine until you get a reputation for cost overruns, get to be known as untrustworthy, and eventually end up with a lack of customers willing to give you positive references. I certainly know which vendors in my industry are known for land & expand and scummy sales tactics (and when I personally see these tactics being deployed I will tell everyone else I know in the industry to avoid them like the plague).

by Closi 4y ago

mox1 4y ago

Yea, at my F500 sized company we set budgets year(s) in advance. I literally have a line item (that gets reviewed monthly!) for each major SAAS product my team uses. We estimate like a 5% inflation YoY into these budgets. If a vendor purposefully under-quoted / undersold me and then asked me to pay more $$ 6 months in, I literally couldn't do that if I wanted to.

Rastonbury 4y ago
Expansion and addons are really common though, the stakeholder has to push for more budget, not too difficult if the product really drives business value
- jjk166 4y ago
  There's a big difference between compounding past success and ameliorating past shortcomings. If implementing some improvement goes well, we accomplish our goals on time and within budget, it's easy to say let's do it again. If a vendor makes me go in front of my boss and say the budget I previously requested was not sufficient and the thing I said would get done wasn't, I will never stake my professional reputation on that vendor again.
- Closi 4y ago
  This isn't about selling customers what they need, then discovering new value through addon's though. The article is quite clear that it is intentionally selling a customer less than what they need in order to get them to buy what they actually need later down the line, once they are already committed. As a simple example, I could sell you a 3-year software license agreement with a 60 day estimated implementation program on a T&M basis. Then after you have signed the software agreement and are committed to licencing we go into blueprinting, I could suddenly say that it's actualy 120 days implementation now, and that will net the vendor an extra $90k revenue in Y1. Then after implementation you realise that you didn't buy the 'Bi-Connector' that was demo'd to you during the sales process because "oh that's actually another license" even though they clearly showed it as core functionality in their demo.
  - Foobar8568 4y ago
    I am dealing with such in different clients, fuck them, fuck these people. Even worse, you are taken hostage to their sales team,what can you do? Break the contract? Penalties when you barely have a working solution? Bring the legal team? Yeah sure, good luck to have anything completed.
jehb 4y ago
Came here to say this. I'm sure there are situations where this strategy may work, but where I've worked (which is primarily outside of line of business operations) budgets can be inflexible in the short term and just as often trend downward as upward. And people move on. Just because you developed a business justification with my the person who owned a budget before me doesn't mean I'm going to identify that need as a business priority, particularly if my first interaction with understanding that piece of our operations is that it requires a ballooning cost allocation.
aaaaaaaaata 4y ago
Do you have a discretionary budget?
- mox1 4y ago
  Yes, but I wouldn't be allowed (or I would be questioned) why I wanted to use that budget on this addon/upcharge. We can always fight to get more $$ (there's always money in the banana stand!), but I do have to put myself on the line to do it, justify the need, etc. I would never do that for a vendor 6 months into a new relationship.
Mandatum 4y ago
That’s why we usually tie you into a 2 year contract with review points for expansion and adjustments, with looots of discounts up front. By year 5 you’re paying sticker price and paying our consultants for integration and Enterprise feature configuration.

safeimp 4y ago

> In reality, 'land and expand' is almost universally hated by customers Honest question but do you have any source for this or is it primarily your personal experience? In my experience land and experience has been leveraged to help get a foot in the door sooner than later, it was never anything more than that. If we had the ability to walk into a shop and start with 100% of the clients environment we'd have done that but the problem was typically tied to the customer not being ready to rollout from 0-100 overnight. For us the best approach was to start small and work with the customer on gradually rolling out as they were comfortable. Regarding your other point: > How about neither of these - how about selling solutions that you honestly believe are right-sized, being transparent about the sizing/requirements assumptions you have made, and then being flexible contractually if reality turns out different? This is how you actually build trust and consumer satisfaction, not by deliberately underquoting. I'm in complete agreement, this is the best case scenario and is certainly the best way to build long-term trust and relationships but universally it doesn't happen or when it does it's not transparent. The customer really has to push to make this happen only leading to anxiety, relationship damage, etc.

nickstinemates 4y ago
> If we had the ability to walk into a shop and start with 100% of the clients environment we'd have done that but the problem was typically tied to the customer not being ready to rollout from 0-100 overnight. On top of that, there's a handful of people, maybe less, who actually have the juice to be able to make this happen even if they wanted to in any given organization. You're likely not talking to them. Teams who need to get shit done today and are ready to roll out are much quicker to transact and less of an organizational risk (time to value vs. contract amount)
thaeli 4y ago
I think you may be talking about two slightly different things. Land and expand in the sense of "land a small, right-sized solution for one group within a large company, then leverage that successful deployment to expedite expansion to other groups, and maybe eventually convert to an enterprise agreement" is great, and often the only way to get in the door at a large org. From the org's perspective, being able to adopt an "existing" solution/provider is often much faster and can even skip some RFP processes. I don't think anyone is saying this is bad. Land and expand can also mean "deliberately undersell/underbid on a large RFP, take an initial loss, then as soon as the customer's locked in slap them with large change orders and annual increases". I don't think I need to elaborate on why this is scummy. The article isn't very clear about which scenario it's advocating. In the simple case of per-seat licensing, I've seen it both ways. From the customer's perspective: If we're looking to buy your product, and say hey, this has some long-term upside, we think it might be used by 500 people within two years, but our initial group is 20 - that's an undersell of sorts. Typically the concessions we would be asking there are less around unit license cost and more around waiving migration/setup charges or sometimes even negotiating a new license category/SKU. (Hey we use 50 seats right now, we'd like to buy 200 more but they're only going to use this one new side feature you implemented, let's find a discounted rate to only license that feature. It's an ethical undersell because it was done with the customer fully aware.) But I've also seen some groups get stuck with the reverse. Sales promised them that oh yeah, this tier will work for you, and then hit them with massive usage-based overages. That's "land and expand" too, but it's scummy.

throwawaysleep 4y ago

"hated" doesn't matter unless customers actually change their behaviour. Companies will get screwed over on low cost RFPs again and again and again and do nothing about it but whine. Customer satisfaction only has value if it drives additional sales, but plenty of orgs do not care. Accenture and IBM have been doing this for decades. They do it because it works.

waynesonfire 4y ago

I have never seen anything remotely to your ideal. Did you forget how competitive and cut throat the world is? You don't sell, you don't eat. Sales is a race to the bottom, a competitor will eat you alive by undercutting or over-promising just the right amount to win the deal.

deleted 4y ago
[deleted]
Closi 4y ago
It probably depends on both the market and the cultural landscape. I'm in the UK, and USA providers are more 'cut-throat' than domestic UK providers in my personal experience when I have tendered enterprise software in the past, and the cultural differences have been massive. Cut-throat is fine until you get a reputation for cost overruns, get to be known as untrustworthy, and eventually end up with a lack of customers willing to give you positive references. I certainly know which vendors in my industry are known for land & expand and scummy sales tactics (and when I personally see these tactics being deployed I will tell everyone else I know in the industry to avoid them like the plague).