Upsell talk in the business community is too often company-centric. After all, we all have bottom lines to increase, and the survival of our jobs and companies depend on how well we do it.
As a result, this company-centric approach means upsells can end up with a pretty bad rep. Everyone thinks the only ones benefiting from upsells are cold-hearted corporations out to milk their customers for everything they’ve got.
But while we’ve all seen companies like this, it’s important to remember that an upsell isn’t all that different from basic product sales. Like basic products, for an upsell to work, it’s got to solve a problem. It’s got to serve a customer need.
It’s got to make your customer happy.
So let’s take today to focus on what upsells can do not for our companies, but for our customers. As every smart executive knows, when we focus on how to make our customers happy, our bottom lines grow.
1. Upsells Help Customers Get Better Results
When upsells are truly customer-centric, they make customers’ lives better.
For example, let’s assume that in today’s age, pretty much every company needs a website. If it has a website, it will likely need to redesign it at one point or another to keep up with rising user experience standards. And let’s say this company finds a web design agency that delivers a beautiful, innovative design, which causes jaws to drop across the company.
It might and might not bring them new leads and sales, but there’s no doubt it’s beautiful and will make a great first impression.
Yet let’s imagine this design agency offers a premium service for companies interested in conversion rate optimization (CRO). That means that, for an additional sum, the agency’s experts will test different versions of layouts, texts, and buttons, until they find the combination that gets the company the most leads and sales.
Want to see conversion rate optimization in action?
And that’s just one spot on their website.
If an agency can prove it can deliver results like this across multiple pages, and the client understands how much more profitable she’s going to be thanks to saying yes to the upsell, then the upsell does what it’s supposed to do – it delivers greater results for the client.
2. Upsells Save Customers the Time it Would Take Them to Evaluate Other Vendors
According to Accenture, even back in 2014, “94% of B2B buyers report[ed] that they conduct some form of online research before purchasing a business product. 55% percent of B2B buyers conduct online research for at least half of their corporate purchases.”
Moreover, according to Marketing Charts, 54% of B2B tech buyers spent a greater amount of time researching purchases than they did in 2012. Plus, according to Marketing Charts, B2B technology purchase decision-making processes involve an average of 6 executives across continents, which likely significantly increases the time it takes to make a final decision in many companies.
No wonder Marketing Charts reports that 68% of B2B buyers “reach out to existing suppliers, colleagues, and peers when faced with a business challenge.”
Source: Marketing Charts
If you have a better solution, which could help your customers more than you’re helping them right now, bringing it up could save them valuable time, which means they’ll probably be saving money just by saving work hours.
And just as importantly – you’ll be taking away the risk that comes with new-to-them vendors.
3. Upsells Take Away the Risk that Comes with New-to-Them Vendors
There’s a reason B2B companies spend so much time researching and evaluating potential vendors. As we previously reported, B2B purchases are such a risky business, that almost half of B2B customers don’t bring up the need for a new solution in their companies because they’re scared to take the risk.
This is absolutely understandable. B2B purchases often mean a high price point, plus precious time to integrate and study the new tool or service. On top of all that, every purchase you make needs to help you move the company forward somehow.
Depending on your position and company size, choosing one vendor over another could potentially be a 5 or 6 figure mistake, which will easily put your job on the line and decrease the chance of getting hired elsewhere in the industry in the same position.
That’s probably why “71% of [B2B] buyers who see a personal value will purchase the product.”
When B2B executives have an opportunity to make a purchase with a vendor they already know and trust to deliver results, the choice is easier. Their history with you significantly reduces the risk, so they’re more likely to advocate for you in their company.
4. Upsells Save Customers Money
The common perception of upsells is that companies are trying to squeeze as much money as possible from their customers while they have the chance. But in reality, upsells could actually save customers money.
As we reported in this ultimate upsell statistics and B2B case studies roundup, not only is it 68% more expensive to acquire $1 from a new customer than it is to upsell current customers, but returning the investment in new customer acquisition takes almost an entire year longer than it does to return your investment in an upsell.
That’s why so many SaaS companies offer discounts when you commit to a full year of subscription instead of simply 1 month.
For example, Teachable is a platform that lets you create and sell courses online, and encourage you to buy an annual program right from the start.
Check out Teachable’s monthly pricing…
… versus its annual pricing:
While they don’t offer an annual plan for “high volume”, the two other plans give you the option of saving almost 2 months’ worth of subscription if you choose to pay in advance for the entire year. If you’re convinced to pay for 12 months now instead of 1, that means Teachable has successfully delivered an upsell.
The significantly lower cost and significantly faster ROI means companies can offer these upsells at a discount, and still make a nice profit.
For Long Term Customer Happiness, Link Upsells to Customer Success
Upsells can be leveraged from the customer’s first purchase by a smart upgrade suggestion combined with great copywriting. But to make upsells a successful long-term strategy in your company, you need to get to know your customers even deeper.
You need to understand customers’ goals, challenges, and their own defined success metrics, then create a cross-organization collaboration to ensure customers actually reach their success milestones. Once you entire company becomes customer focused, it’ll be easier to identify upsell opportunities and increase customer lifetime value, which could make your company up to 95% more profitable.
How can you reposition your next upsell as a contribution to customer happiness and success?