Expansion Discovery

---
name: expansion-discovery
description: >
  Identify expansion signals and structure upsell or cross-sell conversations using land-and-expand
  and Net Revenue Retention principles. Use when user says "upsell", "expansion", "cross-sell",
  "grow the account", "increase ARR", "find expansion opportunities", "NRR improvement",
  "upgrade conversation", "add-on", "renewal and expand", or "land and expand" - even if they
  don't say "expansion discovery" explicitly.
  Applies to CSMs managing account growth or CS teams building expansion playbooks.
---

## Overview

Based on "Farm Don't Hunt" by Guy Nirpaz and "The Customer Success Economy" by Mehta & Steinman,
expansion is not a sales motion - it is a CS motion. Customers expand when they have achieved
value in the current footprint and have a clear problem that an expanded product solves. Pushing
expansion before value is established destroys trust. Waiting too long leaves revenue on the table.

The core insight: Net Revenue Retention (NRR) is the most important SaaS metric. An NRR above
110% means expansion is compounding growth - even with some churn, you're growing. A CSM who
surfaces and advances expansion opportunities is directly contributing to company revenue.

## Workflow

### Step 1: Confirm readiness for an expansion conversation

Expansion should only be pursued when the current footprint is healthy. Check all three:

- [ ] Health score is Green or Yellow-trending-Green
- [ ] Customer has achieved at least one measurable outcome tied to their original goal
- [ ] Champion is active and engaged (not gone dark, not at risk of leaving)

If any of these are false, fix the current footprint first. An expansion push on a shaky
foundation accelerates churn, it doesn't prevent it.

### Step 2: Identify expansion signals from usage and conversation data

**Usage signals** (pull from your product analytics):
- Seats approaching the contracted limit (>80% of licensed seats active)
- Power users creating workarounds for functionality in a higher tier
- High adoption of features that have a premium-tier equivalent
- Multiple departments using the product independently without a coordinated license

**Relationship signals** (look for these in call notes and emails):
- Customer mentions a related problem they're solving with a different tool
- Champion asks about a feature that exists in a higher tier
- Customer references headcount growth, new teams, or org expansion
- Customer asks how other companies in their space use the product
- Executive mentions a new strategic initiative the product could support

**Conversation signals** (direct indicators of expansion readiness):
- "We wish we could do X" - X exists in a higher tier or add-on
- "We're using [competitor tool] for Y" - Y is something you can replace
- "Our [other team] has been asking about this" - new department opportunity
- "We're going to need more seats soon" - volume expansion signal

Document which signals are present for [customer name].

### Step 3: Map signals to expansion type

| Signal | Expansion Type | Conversation Approach |
|--------|---------------|----------------------|
| Approaching seat limit | Volume expansion | Proactive - bring data, frame as planning ahead |
| Using competitor for adjacent use case | Cross-sell / consolidation | Problem-led - quantify the cost of fragmentation |
| New team or department interested | New use case expansion | Reference-led - show how current team's results can replicate |
| Power users hitting tier limits | Tier upgrade | Value-led - show the ROI gap between tiers |
| New strategic initiative | New use case | Executive-led - align to the initiative, not the feature |

### Step 4: Prepare the expansion conversation

Do not bring a pricing sheet to an expansion conversation. Bring value data and a problem framing.

**Structure for the expansion conversation**:

1. **Recap current value**: "Since you started with us, [specific outcome with data]. Your team
   is doing [specific usage behavior]."

2. **Bridge to the observed signal**: "I noticed [specific signal]. I wanted to ask you about it
   directly."

3. **Explore the problem** (use open questions):
   - "Tell me more about how you're handling [adjacent problem] today."
   - "What does that cost you in time / money / risk?"
   - "If you could solve that, what would it change for the team?"

4. **Connect to your solution** (only after the problem is articulated):
   "Based on what you've described, [specific feature or tier] is designed exactly for this.
   Customers in similar situations used it to [specific outcome]."

5. **Next step, not a close**:
   "I'd like to put together a proposal that shows the ROI. Can we get 30 minutes with [economic
   buyer] to walk through it?"

Never close expansion in the discovery call. The goal of this conversation is to earn a proposal
meeting, not to get a verbal commit.

### Step 5: Build the expansion brief for internal alignment

Before advancing the opportunity, align internally with sales (if separate) and your manager.

**[Customer name] - Expansion Brief**

**Account ARR**: [current ARR]
**Potential expansion ARR**: [estimated value]
**Expansion type**: Volume / Tier upgrade / Cross-sell / New department
**Signal(s) identified**: [list]
**Customer contact**: [champion name and title - no personal last names in template]
**Economic buyer**: [who controls budget]
**Discovery call date**: [date]
**Problem confirmed by customer**: [1-2 sentence summary in customer's words]
**Proposed solution**: [specific product tier, add-on, or seat increase]
**Comparable customer reference**: [similar customer who expanded and got X outcome]
**Next step**: [specific meeting or proposal with date]

### Step 6: Calculate and present the expansion ROI

Expansion conversations stall when the customer cannot justify the incremental cost internally.
Build the ROI case before the proposal meeting.

Framework:
- **Current value**: [quantified outcome from existing footprint]
- **Expansion cost**: [delta between current and proposed contract]
- **Expected incremental outcome**: [specific measurable result from the expansion]
- **Payback period**: [months to recover the incremental investment]

Example: "Your current investment is $X/year. Adding [module] is $Y/year incremental. Based on
how similar customers have used it, you would expect [outcome] within [timeframe], which pays
back the incremental cost in [N] months."

## Anti-Patterns

**1. Expansion before value established**
Bad: Pitching an upsell at month 2 of onboarding before the customer has hit their first milestone.
Good: Wait for a measurable outcome. Expansion is earned, not scheduled.

**2. Price-led conversations**
Bad: "We have a special pricing offer on our enterprise tier this quarter."
Good: "You mentioned you're handling [problem] with a separate tool. I want to show you what
it would look like to consolidate."

**3. Surprise the customer with a proposal**
Bad: Sending a contract expansion proposal without a prior discovery conversation.
Good: Discovery call first, always. The proposal follows confirmed problem understanding.

**4. Expanding the wrong contact**
Bad: Running the expansion conversation with the champion but skipping the economic buyer.
Good: Map the economic buyer early. The champion needs to be able to get budget approval. If
they can't, get to the person who can before investing in the proposal.

**5. Treating expansion as a sales handoff**
Bad: "This is a growth opportunity, I'll loop in sales."
Good: CSM drives expansion discovery. Sales may assist on negotiation and legal. The relationship
and the value case belong to CS.

## Quality Checklist

- [ ] Current footprint health confirmed (Green or trending Green) before starting
- [ ] Specific signals documented - not "feels ready," but named indicators
- [ ] Expansion type identified (volume, tier, cross-sell, new department)
- [ ] Discovery conversation structured around problem-first, not product-first
- [ ] Economic buyer identified - not just champion
- [ ] Expansion brief prepared with ARR estimate and comparable reference customer
- [ ] ROI case built before proposal meeting
- [ ] Next step is a meeting with economic buyer, not a verbal close in discovery
- [ ] No personal names, internal tool names, or company-specific references in template