Want to grow your AEC software business from one client to ten? The secret lies in the land-and-expand pricing model. This strategy starts small – like a pilot project for one team – and scales by adding more users, features, or regions over time. Here’s what you need to know:
- Why it works: It’s cost-effective (upselling costs $0.27 per $1 of revenue vs. $1.13 for new customers) and fits the AEC industry’s structure of multiple teams and projects.
- How to start: Offer a low-risk pilot ($5K–$20K/month for 6–8 weeks) with a narrow scope and measurable outcomes.
- Pricing models: Choose between usage-based pricing (flexible, scales with usage) or seat-based pricing (predictable, fixed costs), depending on client needs.
- Expansion opportunities: Focus on upselling modules, adding departments, or expanding to new regions.
- Use MSAs (Master Service Agreements): Simplify scaling by setting clear terms for future growth.
Land and Expand: The Most Misunderstood Strategy in SaaS
How to Structure Foot-in-the-Door Pilot Pricing
Pilot pricing is a smart way to kick-start growth, especially within the land-and-expand model. It’s all about lowering the initial barriers for your first AEC client by reducing upfront costs, minimizing commitments, and easing uncertainties.
Paid pilots are particularly effective because they encourage active participation and foster honest feedback. This approach lays the groundwork for designing pilot offers that resonate with clients.
How to Design Effective Pilot Offers
The best pilot offers follow a simple yet powerful formula: limited scope, fixed timeframe, and measurable outcomes. Your goal? Show value quickly while keeping the commitment small enough to avoid lengthy budget approvals.
A good starting point is to set pilot costs between $5,000 and $20,000 per month for a period of six to eight weeks. This range is ideal – it’s enough to ensure client engagement but still falls within most companies’ discretionary spending limits.
Instead of trying to tackle everything at once, define a narrow scope. Focus on one specific use case or department. For instance, if you’re offering project management software, start by working with a single construction project team rather than rolling it out across multiple sites.
The design phase of a project is a natural entry point. This stage brings together architects, engineers, contractors, and owners, making it the perfect time to demonstrate your solution’s value. Success here can pave the way for broader adoption across the project lifecycle.
Pilot Pricing Best Practices
Building trust is essential, especially with AEC firms that tend to approach new technology cautiously. To avoid surprises, be upfront about both your pilot pricing and the full product pricing from the beginning. This transparency helps clients plan for future expansion.
Set clear, measurable KPIs to evaluate success. Metrics like time savings, error reduction, or improved collaboration provide objective benchmarks, keeping evaluations focused and aligned.
To reduce perceived risk, consider a credit-back structure. For example, offer to credit the pilot fee toward the full purchase if the client decides to continue. This positions the pilot cost as an investment in implementation rather than pure profit, while also creating a financial incentive for expansion.
Align your pilot pricing model with your full pricing structure. This ensures a seamless transition if the client decides to scale up.
Regular communication is key. Schedule weekly progress calls to address any issues promptly and maintain momentum. These check-ins also provide opportunities to identify additional needs and build relationships with other stakeholders.
How to Show Value Early
Once your pilot is underway, the focus shifts to delivering results quickly. The first two weeks are critical – this is when clients form their initial impressions and decide if your solution is worth pursuing. Make these weeks count by delivering quick wins that demonstrate immediate value.
Provide hands-on training and ongoing support to ensure users can fully engage with your solution. Many pilots fail not because the technology is flawed, but because users aren’t equipped to use it effectively.
Track progress and communicate it clearly. Create simple dashboards or reports to showcase the agreed-upon KPIs. For example, if you promised a 20% reduction in project coordination time, show exactly how much time teams are saving each week.
Celebrate real-time wins. When a team member discovers a particularly helpful feature or achieves a notable efficiency gain, share this success with other stakeholders. These organic testimonials often carry more weight than formal presentations.
Capture lessons learned during the pilot and share these insights with the broader organization. This not only highlights the value you’re delivering but also plants the seed for future expansion by showing how other teams could benefit.
Statistics show that piloting can refine processes before full-scale implementation. In fact, companies that test pricing changes through pilots see 27% better outcomes compared to those that skip this step[2].
Don’t wait until the pilot ends to discuss next steps. Start these conversations around week four or five. This gives clients time to prepare budgets and plan for a larger rollout. When you’ve demonstrated clear value, provided excellent support, and built strong relationships, the question shifts from “Should we buy this?” to “How soon can we expand to other teams?”
Usage-Based vs Seat-Based Pricing Tiers
After demonstrating value through your pilot program, the next big step is choosing the right pricing model for scaling up. Usage-based pricing (UBP) is a popular choice due to its flexibility and ability to grow with your clients’ needs.
Pricing Model Comparison
Here’s a side-by-side look at usage-based and seat-based pricing to help you decide which fits your AEC clients best:
| Aspect | Usage-Based Pricing | Seat-Based Pricing |
|---|---|---|
| Cost Structure | Pay for actual usage (e.g., data, transactions, API calls) | Fixed fee per user license |
| Budget Predictability | Costs vary and can be harder to anticipate | Fixed monthly or annual costs for easy budgeting |
| Adoption Barriers | Low initial commitment | Higher upfront investment |
| Expansion Potential | Scales naturally with usage growth | Requires purchasing additional user licenses |
| Value Alignment | Costs directly tied to usage and value received | Not linked to actual usage patterns |
| Revenue Growth | Grows as clients increase usage | Limited to the number of seats purchased |
Usage-based pricing ties costs to the actual value clients get, which can build trust and justify price adjustments as usage grows [4]. On the other hand, seat-based pricing offers a flat fee, regardless of how much each user actually uses the product [4].
The benefits of usage-based pricing include lower entry costs, better customer satisfaction, organic upsell opportunities, and scalability [3]. However, it does come with challenges, such as the need for real-time tracking, more complex billing, and ongoing adjustments [3]. Seat-based pricing, while simpler to manage and easier for clients to budget (especially with annual contracts), can limit adoption by failing to account for varying usage levels [5].
Next, let’s explore when each model might work best for your AEC clients.
When to Use Each Model
Choosing the right pricing model depends on your AEC clients’ workflows and purchasing habits.
When to go with UBP:
- Your product supports fluctuating data or usage volumes.
- The value your product delivers grows with increased usage.
- You’re targeting smaller teams or departments initially.
- You want to start small and expand usage organically over time.
When seat-based pricing makes sense:
- Clients need predictable annual budgets.
- Your product is used consistently by a fixed group of users.
- The primary value lies in collaboration features rather than heavy data processing.
- Enterprise clients are accustomed to traditional licensing models.
- You’re selling to organizations with centralized IT purchasing.
"There’s true viral growth in construction… There’s such strong viral growth in construction. You don’t charge by seats… It’s a nightmare, right? Like you’re stopping your own usage. You’re halting your own viral growth by charging by seats." [6]
This quote from Ralph Gootee, co-founder of PlanGrid, highlights a key issue with seat-based pricing in construction. Projects often involve dynamic teams that share tools, and charging per seat can stifle the organic growth that drives adoption. However, some AEC firms centralize purchasing at the corporate level, making seat-based pricing a better fit in those cases. Others operate on a project-by-project basis, where usage-based pricing aligns more closely with their approach [7].
How to Adapt Models for AEC Clients
To build on your pilot’s success, tailor your pricing model to fit the unique workflows of AEC clients. These workflows differ significantly from standard SaaS environments, with teams and needs shifting throughout a project’s lifecycle [6].
Project-Based Pricing:
Start with pricing tied to individual projects, then transition to broader enterprise tiers over time [7]. This approach works well with construction projects, which have clear timelines and budgets, making costs easier to justify within a specific scope.
Hybrid Models:
Mix a fixed base fee with usage-based add-ons. For example, charge a monthly project fee and layer on additional costs for extra features or services [5].
"Unless you make money, we don’t make money." [7]
This quote from Mike Powers, founder of BuildVision, reflects a partnership-focused philosophy. By aligning pricing with your clients’ success, you create a dynamic where your revenue grows alongside theirs.
Choosing the Right Metrics:
Pick pricing metrics that reflect the value your product delivers. For AEC clients, these could include:
- Square footage for design and planning tools.
- Number of projects for project management solutions.
- Data volume for document management systems.
- Number of stakeholders for collaboration platforms.
Flexibility Is Key:
AEC projects often involve multiple phases and evolving team structures. Your pricing model should adapt without causing friction. UBP naturally adjusts to these changes, while seat-based pricing may require frequent updates to accommodate shifting team sizes.
Usage-based pricing aligns your revenue with your clients’ success [4]. As their projects grow and thrive, so does your revenue. This creates a foundation for long-term partnerships and sustainable growth.
The best approach? Start simple and refine as you go. Test your pricing model with pilot clients, collect data on their usage patterns, and tweak your strategy before rolling it out to larger accounts [7].
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Expansion Opportunities: Modules and Regions
Once your pilot program is successful and your pricing model is fine-tuned, the next step is clear: growth. The secret to turning one AEC client into ten lies in expanding strategically – whether through additional product modules or by reaching new regions. This approach builds on your existing relationships while opening doors to new opportunities both within current organizations and across untapped markets.
How to Design Upgrade Paths
Creating upgrade paths should feel like a natural progression for your clients. This means understanding how AEC firms evolve in their technology needs and aligning your offerings with those changes.
- Leverage usage data to identify when a client is ready for an upgrade. For example, if a construction firm approaches its data limits or requests specific features, it’s the perfect time to discuss next steps. These insights ensure you’re offering solutions that meet their evolving needs [8].
- Make upgrades intuitive. Your product design should clearly highlight the additional benefits available at higher tiers. For instance, AEC clients might move from basic project management tools to advanced analytics or expand from single-project access to full portfolio visibility [12].
- Time your offers effectively. Engage clients when they’re nearing usage limits or entering a new project phase, making the upgrade feel timely and relevant [12].
- Listen to feedback. Use customer input to refine and evolve your offerings, ensuring they align with real-world needs [11].
When clients clearly see the value of upgrading and understand the benefits they’ll gain, the process becomes a natural part of their growth. This step-by-step approach mirrors the scalable pricing strategies discussed earlier.
Expansion Lever Comparison
Different paths to growth come with unique benefits and challenges. Here’s a quick comparison:
| Expansion Type | Key Benefits & Considerations |
|---|---|
| Additional Modules | Boosts revenue significantly – upselling is four times cheaper than acquiring new clients and builds on existing trust [13]. |
| Geographic Expansion | Opens doors to new markets but involves higher risks due to regulatory and regional complexities [10]. |
| Department/Division Growth | Increases revenue by expanding proven solutions across different parts of the same organization. |
Module expansion is often the quickest way to increase revenue, as it builds on the trust and familiarity clients already have with your product.
Geographic expansion, though riskier, can unlock new market opportunities. For instance, between 2010 and 2021, Europe (33.96%) and the Asia Pacific (28.69%) held comparable shares of the U.S. AEC service export market. Europe has taken the lead in recent years, accounting for over 40% of these exports [9].
“Business expansion is the natural outgrowth of a successful firm, whether it includes adding new clients, expanding services to existing clients or entering new markets. With an appropriate amount of planning and discernment, it can elevate the firm’s market presence, reputation and financial strength to the benefit of its owners, employees, clients and communities it serves.”
– Diana Strassmaier, CPA, CCIFP®, Aldrich CPAs + Advisors LLP [10]
Meanwhile, department expansion offers a balanced option. Once you’ve demonstrated value in one area of a company, other divisions are often eager to adopt similar solutions. These strategies allow you to tailor your growth plans to the specific needs of your clients, extending your value through new modules and regions.
Matching Expansion with Client Needs
The most effective expansion strategies align with how AEC firms operate and grow.
- Provide integrated solutions. Consolidate data and empower teams to uncover opportunities [9].
- Use CRM insights. Track client interactions to personalize your expansion efforts. Tailored communication ensures your offers are relevant and well-timed [33, 31].
- Approach geographic expansion thoughtfully. Success requires deep local knowledge – understanding the economy, business practices, and regulations. Partner with local experts to navigate these challenges [10].
- For international growth, do your homework. Assess economic trends, client behaviors, and regulatory factors. Start with a minimal presence to test the waters before committing fully [10].
Lastly, ensure your pricing reflects the value of expanded functionality. Value-based pricing models, combined with discounts for annual or multi-year commitments, encourage clients to invest in additional modules or regions [12].
Support is critical during this phase. With 70% of customers preferring self-service options [14], provide clear resources like tutorials, webinars, and help guides. Monitor usage to identify clients who might need extra assistance and proactively reach out to them [12].
How to Negotiate Enterprise MSAs for Scalable Growth
Once you’ve successfully expanded through various modules and regions, the next logical step is securing a solid foundation for sustainable growth. Master Service Agreements (MSAs) play a critical role here, offering the legal and operational framework that makes future expansion both predictable and profitable.
Why MSAs Matter in AEC
MSAs are essential contracts that define the scope of the relationship between two parties, covering terms and conditions for both current and future activities [15]. In the Architecture, Engineering, and Construction (AEC) industry, where projects often stretch over months or years and involve multiple stakeholders, MSAs provide the stability needed to focus on delivering results rather than constantly renegotiating terms. This is particularly valuable in environments with repetitive, complex, and compliance-driven work [20].
For firms juggling multiple projects across different locations, a well-structured MSA simplifies new engagements by removing the need to draft a new contract for every project. By setting clear expectations upfront, MSAs reduce the likelihood of disputes and allow both parties to adapt quickly to changes in project scope, timelines, or regulatory requirements [15]. These agreements streamline operations, cut costs, minimize risks, and help build lasting partnerships [16]. They also pave the way for detailed terms that enable scalable pricing and smoother negotiations.
Key Terms for Scalable Pricing
To support growth, your MSA should include terms that align pricing with client expansion. Here are some key components to consider:
- Flexible pricing with periodic adjustments: Incorporate volume discounts or tiered pricing that scales with the size of the project [18].
- Expansion provisions: Define how to easily add services, modules, or geographic areas without renegotiating. For instance, outline a process for implementing new Statements of Work under the existing agreement [18].
- Performance standards and metrics: Set clear benchmarks, such as service levels, response times, and error rates, to evaluate performance and identify expansion opportunities [22].
- Intellectual property clauses: Clearly state ownership, licensing, and usage rights for any intellectual property created during the engagement [18].
- Change management and review processes: Establish a framework for proposing, reviewing, and approving changes, with regular review periods to ensure the agreement evolves with client needs [22].
- Termination and renewal clauses: Define the conditions for ending or renewing the relationship, reducing uncertainty about long-term commitments [16].
MSA Negotiation Tactics
Negotiating an MSA requires a strategic approach that balances immediate project requirements with long-term growth goals. Here are some tactics to keep in mind:
- Start with business alignment: Work closely with your AEC clients to understand their project pipeline, growth objectives, and regulatory landscape so the MSA aligns with their strategic goals [17].
- Customize terms and allow for regular reviews: Tailor the agreement to address specific operational and compliance needs, while making it easy to update without extensive renegotiation [19].
- Highlight mutual benefits: Offer incentives like volume discounts or additional support for longer-term commitments [21].
- Set clear dispute resolution procedures: Include mediation or arbitration clauses to resolve conflicts efficiently while maintaining the business relationship [19].
- Define non-negotiable terms: Ensure the agreement supports your growth objectives and aligns with client priorities [21].
- Treat the MSA as a living document: Build in regular review periods to evaluate performance and identify opportunities for further collaboration and expansion [20].
Building a Repeatable Land-and-Expand System
To achieve sustainable growth, your AEC software startup needs more than just a solid pricing model or clever expansion tactics – it requires a repeatable land-and-expand system. This approach shifts your focus from chasing one-off deals to building predictable, scalable revenue. Expansion revenue plays a huge role in this process. For SaaS companies generating over $3 million annually, more than one-third of their growth comes from expansion. For companies exceeding $15 million, that figure climbs to over 40% [23].
Laying the Foundation
The cornerstone of any effective land-and-expand strategy is delivering exceptional value to your initial users [23]. When you meet their core needs so well that they become internal advocates, you set the stage for broader adoption. From there, the process typically unfolds in a few steps:
- Use collaboration features and streamlined onboarding to encourage team formation.
- Analyze user data to identify groups of users who might benefit from being consolidated into a single account [23].
Customer success and sales teams are essential here. Customer success teams help users onboard smoothly, offer support, and identify opportunities for expansion. Meanwhile, sales teams focus on engaging decision-makers and driving enterprise-level growth. Together, they create a system that fosters collaboration and continuous improvement.
The best SaaS companies boast net retention rates above 120% [1], meaning they grow their revenue from existing accounts faster than they lose it to churn. That’s the kind of success this system aims to replicate.
Refining Your System Over Time
Improvement doesn’t happen by accident – it’s all about data. By analyzing customer behavior, you can identify upsell and cross-sell opportunities, track customer health metrics to anticipate needs, and tailor recommendations to align with their evolving goals [24]. The key isn’t just offering more; it’s offering what matters most to your customers.
Peter Lukens from NJP Ventures highlights the importance of unified data:
"Whether it’s just the Account Executive (AE) responsible [for upselling] or the AE, CS, and the renewals team, having one source of data and understanding how your customers are using your product is super important." [27]
Reducing friction in the customer journey is another critical element. Alyson Welch, CRO at Neo4j, suggests taking a proactive approach:
"Go back in and reassess what you’re doing to give customers an experience of validation that what they’ve purchased is going to drive the outcome that they’re anticipating. Being able to speak in the customer’s language really shows intent, and I think intellectual curiosity shows that you care about your customer. That goes a long way in a slow economic period. Offer things like solution audits and graph assessments to help assure customers that they’re getting the most out of the dollar that they’re spending with us." [27]
Moving Forward
To deepen client engagement and drive account-level growth, your system needs to go beyond individual users. Focus on understanding the structure of your client organizations and the full range of potential use cases for your product [26]. As one expert puts it:
"Customer development isn’t a sales strategy or a customer success strategy. It’s a business strategy." [26]
This means building relationships with all relevant stakeholders within your clients’ organizations. Work closely with IT teams to ensure seamless integration, and continually explore new features or departments where your product can add value [23]. Just like in the initial phases, coordination across teams is vital for long-term success [25]. Clear processes and shared goals keep everyone aligned.
The AEC software market is projected to reach $24.36 billion by 2032, growing at an annual rate of 10.3% [28]. With 72% of firms revising their remote work policies since 2020, the demand for cloud-based collaboration tools is on the rise [28]. A well-executed land-and-expand system positions you to capitalize on this growth, turning happy customers into your most effective sales force.
FAQs
How do I decide between usage-based and seat-based pricing for my AEC clients?
When choosing between usage-based and seat-based pricing, it all comes down to understanding your AEC clients’ specific needs and how they interact with your services.
Usage-based pricing makes sense for clients whose demands vary, especially those working on short-term or irregular projects. This approach allows them to pay only for what they use, making it a more budget-friendly option for fluctuating workloads. In contrast, seat-based pricing is a better fit for clients with steady, predictable usage – think teams with fixed sizes and ongoing, long-term projects.
The key is to analyze your clients’ usage habits, the scope of their projects, and their future plans. This way, you can recommend the pricing model that balances flexibility with cost-effectiveness, delivering the best value for their unique situation.
What should I focus on when creating a pilot project to engage clients and encourage future growth?
When setting up a pilot project, start by establishing clear objectives and measurable results that directly address your client’s needs. Lay out the project’s scope, identify the target audience, and define success metrics early on. This ensures everyone is on the same page about what the project aims to achieve.
Keep your clients involved by seeking their feedback at key stages and demonstrating the value your solution delivers. This not only strengthens trust but also boosts the chances of growing the partnership. Make sure to include a plan for collecting and analyzing data, as this helps pinpoint areas for improvement and refine future efforts. A well-planned and executed pilot can open the door to long-term success and wider adoption.
How can AEC firms negotiate and leverage Master Service Agreements (MSAs) to drive scalable growth?
Master Service Agreements (MSAs) play a crucial role in driving progress within the AEC industry. When negotiating MSAs, the goal should be to craft clear, client-focused agreements that ease the process for future projects while cutting down on repetitive back-and-forth. This not only saves time but also fosters trust and strengthens long-term business relationships.
By standardizing essential terms and conditions, MSAs simplify project onboarding, help avoid unnecessary delays, and make it easier to expand into new markets or services. Focus on creating agreements that are straightforward and adaptable, ensuring they meet current needs while leaving room for future opportunities.
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