Right now, businesses are finding it tough because everything is getting more expensive. It’s costly to get new customers, so many companies are looking for other ways to grow.
One smart way to do this is by focusing on the customers you already have. You can try to sell them more (upselling) or different products (cross-selling). This can be cheaper and more effective than trying to find new customers.
Researchers say it can be 5 to 25 times cheaper to keep a current customer than to get a new one. That’s why it’s important to keep your customers happy and try to sell them more over time.
This article will make it easy to understand what an expansion qualified lead is. You’ll learn how to find these kinds of customers and sell more to them, especially through upselling and cross-selling.
What is Expansion Qualified Leads (EQLs)
An Expansion Qualified Lead (EQL) is an existing customer who has been recognized as having potential for additional business development through upselling or cross-selling.
Unlike new prospects, EQLs have already engaged with the company’s products or services. This makes them prime candidates for growth opportunities. They’ve shown good usage, satisfaction, and evolving business needs.
An Expansion Qualified Lead (EQL) is not just another name on your contact list. It’s a golden nugget nestled in your existing customer base that holds the potential for upselling or cross-selling.
EQL falls in a category of leads that seek to unlock further value from customers already on board, with a keen focus on product-led growth companies. It’s like the cousin of Product Qualified Leads (PQLs), both born out of the need to land and expand opportunities.
But, EQLs are not your run-of-the-mill Marketing Qualified Leads (MQLs), Sales Qualified Leads (SQLs), or Product Qualified Leads (PQLs). They require a unique, razor-sharp approach that balances the potential of increased revenue with the risk of losing a paying customer.
The key is to understand your customers’ businesses. This is for cross-selling and upselling. You must do this while following an effective lead qualification process to find a sales qualified lead.
EQLs vs PQLs: What are the Differences?
EQLs, or Expansion Qualified Leads, differ from PQLs, which are Product Qualified Leads, in several key aspects.
PQLs typically refer to leads that have already used your product, often in a trial or a limited version, and have shown a clear interest in it based on their interactions and usage patterns. They are at a stage where they have experienced enough of the product to understand its value, making them ripe for a sales conversation.
On the other hand, EQLs are existing customers who have gone beyond the initial product adoption phase. They have used your product or service.
They have potential for more business through extra purchases or upgrades. They are opportunities for upselling or cross-selling. EQLs are recognized for their potential to expand their relationship with your company, whether by moving to a higher tier of service, adding more users, or incorporating additional products into their business operations.
The primary distinction lies in the relationship stage with the customer and the type of opportunity each lead presents. While PQLs are about converting a lead into a first-time customer, EQLs focus on growing the business with someone who is already a customer.
Why EQLs are Important?
It’s essential to delve deeper into the role of Expansion Qualified Leads (EQLs) in go-to-market strategies. EQLs play a significant role in driving growth and revenue. They’re the secret ingredient you need to level up your business.
EQLs are nothing but an evolved form of Product Qualified Leads (PQLs). These leads arise from your existing customer base who already appreciate and utilize one of your product tiers. But here’s the twist! EQLs have a history of providing business to your company and present potential for further expansion.
EQLs are crucial. They are very important for the sustainable growth of any business today. EQLs tap into the existing trust and relationships with current customers. They offer a more reliable and cheaper way to grow revenue. This is compared to the uncertain and often costly process of acquiring new customers.
Moreover, EQLs can be seen as a testament to the quality of your product or service. When customers are willing to buy more from you or explore different offerings, it’s a clear sign. They value your business and are likely to keep buying. This not only helps in increasing the average transaction size but also contributes to a more predictable and stable cash flow.
In essence, EQLs are a key asset in your sales arsenal. They provide a path to deepen customer engagement, increase customer value, and, in the end, drive your business to new success.
How to find Expansion Qualified Lead?
Wondering where to spot these EQLs? It’s not a hunt for hidden treasure, but some investigation is required.
Milestones such as reaching an EQL status can signal when an account is ripe for expansion, separating EQLs from other lead types.
A key to unlocking these opportunities lies in retention analysis. Understanding product usage patterns lets you link feature usage and customer satisfaction. It helps you find potential EQLs.
1. Talk with customers
One of the best ways to see if your customers are Expansion Qualified Leads (EQLs) is to talk directly with them.
This can involve discussing their current use of your products or services, their satisfaction levels, and their additional needs. These talks can reveal if they’re ready to upgrade. They may want to add users or integrate other products into their workflow.
For example, company compliance and requirements might necessitate special features like
- role-based access
- audit logs
- SOC2 compliance
Ask your customers about their needs. You can learn if they need the features. This can show their potential EQL status.
2. Leverage Product Usage Data
Analyze customer usage data to identify those who are extensively using your platform. High engagement often indicates satisfaction and potential interest in more features or services.
For example, consider an account that is consistently utilizing 80-90% of the licensed capacity of your product. This usage pattern is a prime example of an EQL. It shows that the customer is getting the most from their current plan. They may soon need more capacity.
Another example is an increase in user frequency or more feature usage at a company. This can signal a need for more services or higher-tier plans.
Also, talking to support often about advanced features or extra services may also show a customer is ready for expansion. It hints at their EQL potential.
3. Find Success Stories
Discover customers who have not only achieved significant success using your platform but have transformed their operations with it.
These success stories often highlight satisfied customers. They have truly integrated your services into their business model, creating a symbiotic relationship. These customers are typically more receptive to exploring additional features or services that could further enhance their productivity and success.
By celebrating these successes, you validate the customer’s achievements. You also open the door to discussions about expansion, making them prime candidates for EQLs.
4. Analyze Feedback and Survey
Regularly collect and analyze customer feedback to uncover invaluable insights.
Customers who give helpful feedback or show a keen interest in new features are often ripe for expansion. They can be seen as potential leads.
Their feedback engagement is a strong sign of their investment in your product. It can signal their readiness to consider upselling or cross-selling.
5. Develop Predictive Lead Scoring System
Utilize your predictive lead scoring algorithm to predict which accounts are most likely to expand. Look for intention signals and behavioral patterns that your AI identifies as indicators of expansion potential.
This system takes into account various factors such as customer behavior, demographics, and specific interactions with your brand.
Develop a full lead scoring model. It lets you gauge how ready your customers are for upselling or cross-selling.
Additionally, using predictive lead scoring tools can enhance this process. They use algorithms and machine learning to analyze old data and predict which leads are likely to become EQLs.
6. Sales and Support Interactions
Dive into the details of customer inquiries and support tickets. Pay close attention to the type of questions and problems raised by customers. These interactions can be a goldmine of information.
Inquiries about additional functionalities, requests for new integrations, or even occasional frustrations with current limitations can all hint at a customer’s readiness for more advanced solutions.
These signals often show a customer’s expansion potential. They reveal upselling or cross-selling opportunities that might not be immediately clear.
7. Networking and Events
You can engage with customers through webinars, workshops, and industry events. This will help you understand their changing business needs and challenges.
These interactions can give key insights. They show how your products or services can help their growth.
Organize these events. You can network and present your latest offerings. Get feedback and find potential Expansion Qualified Leads (EQLs). They may benefit from extra features or higher service levels.
8. Track Customer Health Scores
Use your platform’s comprehensive customer health scoring system to pinpoint those customers who exhibit high levels of satisfaction and engagement.
This system is often based on a mix of usage metrics, support interactions, and customer feedback. It shows how ready a customer is for expansion.
A high health score suggests the customer gets much value from your services. They might be open to advanced features or other offerings. They are prime candidates for upselling or cross-selling.
What to do after qualifying a expansion lead?
After lead qualification, the next step is to formulate a strategy. But where do you start?
The first step is to evaluate your existing sales processes. This will help you uncover potential oversights in customer expansion opportunities.
Next, you’ll need to formulate a unified criterion for identifying EQLs. This criterion should support your company goals and customer success objectives, ensuring that all your ducks are in a row.
After devising your strategy, the subsequent step is to prepare your team. All pertinent teams should be well-versed in the established EQL criteria. This fosters a well-informed and cohesive EQL strategy. It ensures that everyone is on the same page and working towards the same goal.
Aligning Sales and Customer Success Teams
The execution of an EQL strategy extends beyond mere statistics. It’s about creating a team culture.
Sales and customer success teams work together. They do this to maximize customer lifetime value and expansion revenue. Setting up clear communication channels and rules is crucial. They allow teams to share insights on customer needs and expansion.
Your customer success team relies heavily on EQLs. They help achieve the goals of upselling and cross-selling to your existing clientele.
Why is this so important? Because the statistics are overwhelmingly in your favor. The chance of selling to an existing customer is impressive. This can be through upselling or cross-selling. It ranges from 60-70%.
But, EQLs are not just about the numbers. They’re about nurturing customer relationships. When customers share feedback on your service or support, they’re giving you a roadmap to product improvements. These improvements could create EQL prospects. Your customer success teams then must manage and use these chances for upselling and cross-selling.
Cross-department meetings and remote platforms can speed up communication between teams. This includes the marketing team. They also help optimize the conversion process. This drives growth and boosts conversions. Regular meetings allow these teams to strategize together. They also learn how to handle customer queries and share feedback.
However, the emphasis isn’t solely on communication. Training opportunities focus on both hard and soft skills. They can improve the staff’s ability to deliver great customer service. Also, teaching these teams about EQLs’ importance and traits ensures a consistent approach. It helps them identify and nurture EQLs.
Creating Targeted Sales Outreach for EQLs
Upon scoring your leads, the next step in sales funnel is to initiate contact. This isn’t a standard sales outreach – it’s focused, personalized, and multi-faceted. Tailoring sales outreach can improve getting and keeping customers. Many consumers respond well to tailored experiences.
So, how can you tailor your outreach? Here are some methods to consider:
- Use the ‘3×3 rule’ – tailor your communications to the prospect’s specific situation by focusing on three key points that are relevant to them.
- Ensure benefits are clear to the prospects. Highlight how your product can solve their pain points or meet their needs.
- Use multi-channel outreach. Leverage different channels, like email, social media, video, and direct mail. This provides a full and personal way to engage with EQLs.
Use these strategies. They will help you customize your outreach and sales process. This will increase your chances of success.
Also, adding carefully chosen gifts to sales outreach can help form stronger relationships. It can also enhance engagement with EQLs.
Utilize product led sales motion
Incorporating a product led sales motion is a transformative approach to unlocking Expansion Qualified Leads (EQLs). This method places the product itself at the forefront of the sales process. It allows the product to drive customer acquisition, expansion, and retention. With this strategy, the product experience becomes the main vehicle for growth, creating opportunities for customers to explore and understand the value of additional features and upgrades organically.
By leveraging a product led sales motion, businesses can streamline the path to expansion by demonstrating real-time value through the product usage. This approach encourages customers to become champions of the product, often leading to increased customer satisfaction and a higher likelihood of expansion through upselling or cross-selling. The key is to provide an exceptional product experience that speaks for itself, reducing the reliance on traditional sales tactics and instead fostering a customer journey that naturally evolves into an EQL.
In conclusion, EQL strategies tap the untapped potential in your existing customers. They drive growth and boost revenue. To succeed with EQL, understand it. Align your sales and customer success teams. Implement a good EQL strategy and use customer data. The case studies of Companies A and B show the effectiveness of these strategies. They are real-world examples of EQL success. Remember, the key to unlocking the goldmine of EQLs lies in your hands. Are you ready to dig in?