Your sales team closes a $10K deal. Three years later, that customer still spends $10K annually.
The "expand" part of land-and-expand never happened.
This is the land-and-expand failure mode: you optimize so hard for easy entry pricing that you eliminate expansion paths. Customers get what they need from the entry tier and never upgrade.
Land-and-expand pricing requires two things working together: an entry point that's easy to buy and a growth path that's natural to climb. Most companies nail one but miss the other.
Here's how to design pricing where both landing and expanding actually work.
The Landing Pricing: Easy to Say Yes To
The "land" price needs to pass three tests:
Test 1: Does it match available budget?
Your ideal customers should be able to approve the entry price without exceptional budget processes.
- For individual contributors: Under $100-200/month (credit card, no approval)
- For team leads: Under $1K-2K/month (manager approval, no procurement)
- For department heads: Under $10K/year (budget line item, minimal friction)
Price above these thresholds and your land motion becomes a sales motion. That's fine if you want sales-led growth. It doesn't work for true land-and-expand.
Test 2: Does it deliver real value?
Entry pricing that's cheap but useless doesn't lead to expansion—it leads to churn.
The entry tier must solve real problems well enough that customers succeed. They should think "this works, I want more" not "this is limited, I'll tolerate it until something better comes along."
Test 3: Is it defensible vs. free alternatives?
If free or freemium competitors exist, your entry price needs to offer meaningfully more value. Competing against free requires solving problems free products don't address:
- Better support
- Enterprise features (security, compliance, integrations)
- Time savings that justify cost
- Professional reliability vs. hobby project risk
Price your land tier at the point where value clearly exceeds free alternatives.
The Expansion Path: Natural Progression, Not Forced Upgrades
Entry pricing gets customers in. Expansion pricing grows revenue. But expansion only works if customers want to expand, not just need to.
Three expansion triggers built into pricing structure:
Trigger 1: Usage growth
Customers naturally consume more as they get value. Price should scale with consumption:
- More users as team adoption grows
- More volume as their business scales
- More data as their needs deepen
Structure:
Entry tier: 5 users, $99/month Growth tier: 25 users, $399/month Scale tier: Unlimited users, $999/month
Customers start small, hit limits naturally, expand without thinking about it.
Trigger 2: Capability growth
Customers start with basic needs. As they mature, they need advanced capabilities:
- Automation (eliminates manual work they're currently doing)
- Integrations (connects to tools they add later)
- Analytics (answers questions they didn't know to ask initially)
- Customization (adapts to their specific workflows)
Structure:
Entry tier: Core features only Growth tier: Core + automation + integrations Scale tier: Everything + customization + advanced analytics
Customers succeed with entry tier, then discover friction that higher tiers eliminate. Expansion feels like progression, not penalty.
Trigger 3: Audience growth
Customer starts with one team. Product works well. Other teams want it.
Structure:
Entry tier: Single team (sales, marketing, or support) Growth tier: Multiple teams Scale tier: Company-wide deployment
Each team that adopts represents expansion revenue. Price per team or per use case, and expansion happens through internal advocacy.
Land Pricing vs. Expand Pricing: Different Economics
Common mistake: using the same pricing logic for land and expand.
Landing is about minimizing friction. Expansion is about capturing value.
Land pricing principles:
- Price to budget availability: Can customer approve this without pain?
- Price to competitive alternatives: What do free/cheap options cost?
- Price to minimize risk: Customer wants to trial before committing
Expand pricing principles:
- Price to value delivered: Customer has proven value; capture it
- Price to usage growth: They're using more; they should pay more
- Price to opportunity cost: Switching away now has high friction
This means:
- Land pricing might have aggressive discounts, free trials, money-back guarantees
- Expand pricing is closer to list price, less discounting, more value-based
Entry customers get a deal to reduce adoption risk. Expanding customers pay fair value because they've validated the product works.
The Freemium Trap in Land-and-Expand
Freemium seems perfect for land-and-expand: free land, paid expand. But freemium fails when the free tier is too good or too limited.
Too good: Customers never upgrade because free tier meets their needs
Solution: Include core value in free tier but create meaningful friction that paid tiers eliminate:
- Limited integrations (free tier lacks Salesforce integration, paid tier includes it)
- Basic support (free = community, paid = email/chat support)
- Usage caps (free = 100 actions/month, paid = unlimited)
Free tier should prove value. Paid tier should be obviously better for anyone using the product seriously.
Too limited: Free tier is so restricted that customers can't discover value
Solution: Ensure free tier solves at least one complete use case:
- Free = individual use
- Paid = team use
Don't cripple features to the point where free tier feels like a demo. It should feel like a real product with natural limits.
Multi-Product Land-and-Expand
Single-product companies expand by usage/tiers. Multi-product companies expand by adding products.
Product sequencing strategy:
Product 1 (Land): Easiest to adopt, fastest time-to-value, broadest appeal
Example: Basic CRM for sales teams
Product 2 (First expansion): Natural next step for successful Product 1 customers
Example: Email automation for sales teams already using CRM
Product 3 (Second expansion): Deeper capability for mature customers
Example: Revenue intelligence and forecasting
Each product builds on previous adoption. Customer who succeeds with Product 1 naturally wants Product 2.
Pricing strategy for multi-product expansion:
- Product 1 priced aggressively for adoption
- Product 2 priced at modest premium (customer has proven willingness to pay)
- Product 3 priced at full value (customer is deeply committed)
- Bundle discount for buying multiple products together (10-15% off)
Revenue grows not from increasing price on Product 1, but from selling Products 2 and 3 to existing customer base.
Time-Based Expansion: When to Prompt Upgrades
Land-and-expand fails when you don't actively encourage expansion. Customers won't upgrade just because you hope they will.
Expansion prompts at key moments:
30 days after signup: Onboarding complete, value proven
Prompt: "You've created 50 records this month. You're on track to hit your plan limit. Want to upgrade to unlimited?"
80% of usage limit: Before they hit friction
Prompt: "You're using 8 of your 10 user seats. Add more users now to keep momentum going."
Feature discovery moment: When they try to use unavailable features
Prompt: "Advanced analytics is available on Professional plan. Upgrade now to get insights on your data."
Quarterly business reviews (for higher ACV): Scheduled check-ins
Prompt: CS team reviews usage, identifies expansion opportunities, proposes upgrades
Don't wait for customers to ask. Proactively prompt when expansion makes sense.
Measuring Land-and-Expand Success
Track these metrics to know if your model is working:
Land metrics:
- Conversion rate to paid (if freemium) or first purchase
- Time to first value (how quickly do customers succeed?)
- Customer acquisition cost (CAC)
Expand metrics:
- Net Revenue Retention (NRR): Revenue from cohort today vs. one year ago
- Time to first expansion (how long from land to first upgrade?)
- Expansion ACV vs. initial ACV (how much bigger is expansion vs. entry?)
Healthy land-and-expand benchmarks:
- NRR above 110% (expansion covers churn with room to spare)
- 40%+ of customers expand within first year
- Average customer lifetime value (LTV) at least 5x initial ACV
If land metrics are great but expand metrics are weak, your entry price is too good or expansion path is too unclear.
If expand metrics are great but land metrics are weak, your entry price is too high or value isn't clear enough.
Common Land-and-Expand Pricing Mistakes
Mistake 1: Entry tier so cheap that customers never feel price pressure
$10/month pricing never creates expansion urgency. Customers can stay on entry tier forever.
Mistake 2: Huge pricing gaps between tiers
Entry tier: $49/month Growth tier: $499/month
10x price jump feels like punishment, not progression. Keep tier gaps reasonable (2-3x maximum).
Mistake 3: All features in entry tier
If entry tier has everything, why would anyone expand? Hold back advanced features for higher tiers.
Mistake 4: Forcing expansion through artificial limits
Limiting entry tier to 3 users when customer needs 5 just frustrates them. Limits should be natural constraints (storage, volume, features), not arbitrary caps designed to force upgrades.
Mistake 5: No expansion path for small customers
Customer loves your product but stays small (5 users, modest usage). Your pricing model assumes they'll grow to 50 users.
Build expansion paths for both scaling customers (more usage) and deepening customers (more features at same usage level).
The Real Goal
Land-and-expand pricing is a business model, not just a pricing strategy. It requires product design, sales motions, and customer success all aligned to the same expansion path.
Price entry to minimize adoption friction. Price expansion to capture value as customers grow.
Get both right, and revenue compounds from every cohort you land.