Customer Growth: Why Lack Of Expansion Is A Really Bad Sign

Customers buying more from you is awesome.

I mean, you’re in business here and getting customers you’ve already acquired to expand their relationship with you just seems like a super-efficient way to grow.

And it is.

So when you have customers that don’t expand their relationship with you, it’s obvious that this is less-than-ideal revenue-wise.

But it’s more than that.

So much more than that.

Let’s dig in, shall we?

First, you must understand that expansion is part of the customer’s journey toward success.

Think about this… what do you sell customers on initially?

It’s most likely “do business with us, and you’ll become a better version of yourself.” We’ve all seen the Mario==>Super Mario meme.

So your customers come in assuming, since they bought your product or service, that they’re going to make that transformation.

But… most companies drop the ball right there. They don’t follow-through on that promise to make the customer a better version of themselves.

So the company ends up with high churn and within the customers that stay, very little to zero growth.

Often there’s contraction!

But if you actually follow-through on the promise made during the initial sales process, at some point down the road, your customer changes. They evolve. They grow. The customer’s Desired Outcome changes.

This is by design (or should be!).

That means you need to evolve and grow your relationship with them to meet this new Desired Outcome.

In order to meet their new goals, they will likely need to consume more of your offering: add-ons, additional capacity, services, other products, bring in users from other parts of their company, etc.

This isn’t really an “upsell” in the traditional sense as much as it is simply giving them what they need to continue their journey toward success.

If customers aren’t buying more, it is a sign they aren’t truly successful.

This means 100% retention at the same level isn’t actually something to celebrate. Sorry.

Successful customers expand. Period.

About Lincoln Murphy

I invented Customer Success. I focus primarily on Customer Engagement. Learn more about me here.