Just as a humorous preface, I wanted to write about our mistaken impressions of Hunting and Farming. I wanted to suggest both co-exist, both in new and current accounts. So I was looking at how I might combine the concepts into one word. At first I came up with Harming—which I discarded for very obvious reasons. That left me with with the concept of Funting. I’m not totally satisfied with this, and am open to suggestions.
The concepts of hunting and farming have classically been applied to the acquisition of new customer logos and how we manage those customers/logos once they become customers. But the concepts of hunting are critical within our current customers. And I will make an argument the concepts of farming are interesting in acquiring new customers (at least in certain segments).
But let me first explain my personal bias underlying the discussion.
I firmly believe it’s our “God-given right” to 100% share of customer (account) and 100% share of market! It’s our jobs in our GTM strategies. And while it is impossible to do this, nothing should divert us from getting as close as we can.
Classically, we’ve labeled sellers who focus on acquiring net new logos, “hunters.” They explore the forests and jungles in their territories to find and acquire a new customer. Once they have secured the PO, they are off to pursue new game.
Those accounts are turned over to the farmers. Their jobs are to keep the customers happy. Their focus is retention and renewal, maintaining the revenue streams for life. Secondarily, they look for expansion, making sure everyone in the corporation that could use the product is using it. Perhaps one division of an organization is using the product, but other divisions in the same enterprise can use the same product. We actively seek to expand into these divisions (and I believe these selling motions more resemble hunting than any other) And, periodically, as our products are upgraded, farmers seek to upsell the current customers on those upgraded products, “Buy our V2 version with expanded capabilities….”
The thought is these farmers are basically deepening their relationships with the people they have always dealt with, keeping them happy so they don’t search for and find a new solution to displace our current solutions.
This strategy has become derigueur for SaaS companies and those other companies with very narrow product lines. “If you have only one thing to sell your customer, your focus is keeping them happy and using it, you don’t have anything else to sell them.”
But what about large multi-product/service companies? What about those companies that have very diverse product service offerings? We close a net new logo with one of our offerings. Naturally, we want the customer to retain, renew, expand; but we have so much more opportunity! We want to hunt within those current customers to aggressively find opportunities for those products/services. Other divisions, other business units, other functions? If I’m SAP, I may have started with ERP solutions, but our financial, data management, customer management and other offerings offer great potential to different buying groups in the organization. Or I’m Barclays Bank and we landed a customer with our commercial lending offerings. We want to expand into treasury, foreign exchange, investment and other offerings.
For multi-product/service companies, landing the new customer is just the start of hunting season. Hunting season continues until we have addressed every opportunity within that customer. We have achieved that unreachable goal, “100% share of customer.” And assuming the customer doesn’t change or expand, we focus on retention and renewal of all of those offerings.
The skills, for this kind of expansion within our existing customers are very similar to those needed to acquire those customers in the first place. So hunting is critical for both acquiring net new logos and for expanding the use of all our product/service offerings within those customers.
What about the concept of farming for net new logo’s?
OK, I know you are thinking, “Dave, what are you smoking?”
But what about those companies whose GTM strategy is driven by PLG? (Product Led Growth for the neophytes.)
If you look at PLG strategies, they are absolutely aligned with our farming strategies. We present an offering to the market that needs no selling, customers are compelled to buy because of the capabilities the products offer them, as individuals or small work groups. Once these individuals are using these products, we want to keep them happy–rather ecstatic.
What we are doing is planting a seed……… Oops, that’s farming isn’t it?
We want them to be constantly using these products, we want them to get them to expand the use of the products to their colleagues and teammates. And we hope to reach a tipping point, where we can move from purchases by individuals to getting the entire enterprise to buy the offerings. The selling skills for this are the skills typical of hunters. Yet they are selling into an existing logo account.
Now surely you are confused!
We need hunters for net new logos! But we need hunters to get 100% share of customer.
We need farmers to retain/renew/expand within our current customers. But if we have a PLG strategy, we implement a farming strategy to acquire the initial food hold into the customer, so that later we can acquire 100% of the customer.
The hunting/farming mentality focused on net new logos vs. growing our current customers is an outdated GTM mindset (I’ve been around for a few years and involved in dozens of industries/markets, I’ve never seen this thinking around hunters and farmers as relevant. Even real farmers, people who raise crops, are constantly looking for new customers.
Instead of the either/or mindset of hunting/farming, we would better serve our customers and ourselves if we think of funting…….. (OK, you know I had to find a way to inject that into the conversation.) Do we expect the same people to do both? Probably not, there are different skills for the different selling motions, but we have to leverage both appropriately. Just like we don’t expect our sellers to have deep knowledge of all our products and support them with specialist sellers, we have to think of teams of hunters and farmers focused on achieving 100% share of customer and market.
Now some of you regular readers might be thinking about another potential problem to my thesis. It’s actually a quite exciting problem and we see our highest performing clients addressing this rigorously.
Here goes, “What happens when you have achieved 100% share of market and 100% share of customer? How do you grow?”
This is where driving business growth gets really exciting. It poses the theoretical problem that we’ve sold everything we possibly can to everyone who can possibly buy. How do do we continue to grow?
Continuing to grow our business means we are constantly in search of new customers or new things to sell customers. As we achieve dominant shares of certain markets, a great growth strategy is to expand into new markets. For some it’s geographic market expansion, for others it’s industry segment market expansion. For some it’s functional expansion (expanding to address multiple functional departments in the organization).
We see this in every sector with high performing organizations. Within tech/software, we see SFDC expanding beyond CRM, we see Microsoft expanding beyond MS-DOS/Windows. In semiconductors we’ve seen the limitation of not expanding the product lines with companies like Intel. We’ve seen the death of many systems companies because of their failure to adapt to changes in their markets. In basic materials companies, we see the companies expanding the materials offerings or customizing the offerings for unique markets/customers. We see automotive companies expanding their offering to address different regional preferences, different target customer segments, and so forth.
At some point, if we have been successful in maximizing our penetration of our target markets/customers, every organization has to look to innovate, change, or be acquired by those who innovate and change.
And this will always drive the need for diverse selling models applied to their target markets customers.
So it’s time to stop the hunting/farming discussion. It no longer serves anyone. And I’m not suggesting we talk about Funting, as fun as it seems. Let’s just focus on acquiring and serving our customers through creating great value. Let’s not be satisfied until we have achieved 100% share of customer and market—and let’s not be satisfied with that.
Afterword: For those of you struggling with the goal of 100% share of customer and market. We never achieve this, it’s an aspirational goal. But there are many companies where the marginal costs of continuing to focus on current products/services, customers, markets far exceed the returns they get. Those vary by company, product, market. But to grow profitably, these companies have to think differently, whether it’s about their product, markets or a combination of these.
Afterword: Here is the AI generated discussion of this article. I was worried about how these characters might handle my sense of humor and whether they would get what I’m trying to communicate.
They actually did a great job and, themselves, had fun in exploring the topic. Enjoy!
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