It took you a lot of work, but you managed to secure company buy-in to invest more in your current customers. You’ve shown the c-suite the numbers, and everyone on your team is excited to secure up to 1,300% higher revenue.You work hard on your relationships with your existing customers, you make sure their experience with your company sets competitors way behind, but now it’s time to do good on your word and deliver that great revenue.How do you identify upsell opportunities?
Step 1: Set Upsell Goals
As in anything in business, before you send your team to identify upsell opportunities, figure out your goals.Some companies set monetary goals (as in, we want to grow our revenue by this or that amount this year). Some companies decide on products they want to get into the market more, or new products they want to launch. Other companies choose what type of customers they want to focus on – vertical, company size, geography, or any other metric that matters to you.Either way, make sure you’re not part of these scary stats the Harvard Business Review reported, where almost 50% of senior executives don’t know what their companies priorities’ are, and other team members know even less. To make sure you reach your upsell goals, get everyone in the company working together.Here’s how Rick Haviland, CEO of MarketSource, a company that has generated over $6 billion in sales, sets strategic corporate goals to ensure a holistic cross-organizational growth in the same direction:
Source: SBI TV via YouTube
Step 2: Analyze Revenue Sources and Account Potential
While goals are critical to staying focused, you want to make sure that your upsell strategy is based in reality. You might want to sell the premium subscription version of your marketing automation software, but your target audience might prefer getting more of your “do it for us” service. Or maybe the market segment you’re targeting is already max out on number of seats or services.That’s why it’s recommended to look at what’s brought you most revenue in the years, and how many times your customers have renewed. According to Harvest CFO Consulting, “analyzing sources of revenue can yield a wealth of information, which results in more targeted and more efficient deployment of resources, capital and decision making and, therefore, increased returns on investments in sales and marketing.”Analyze your client pie to find out which is your fastest growing customer segment, and if possible, segment it further to find out which products are making the biggest impact on which market. You’ll see that different upsells could work for different segments. For example, if you know that your account has 100 seats but you have only sold 50, you know there is a chance to double your sales through expansion. Perhaps the 100 seats is growing 20% year-over-year, then you can actually triple the sales over a two-year period.
Step 3: Analyze Customer Data Across Departments
Analyze customer data you already have across departments. See what complaints customer service gets, what tech challenges IT has been asked to improve, what great results customers told your customer success managers about.Use online data, too. Review discussions about your company and products on social media, review interactions with your social media platforms, blog comments, article shares, page views, email open rates, webinar attendance, questions your audience sends your way, etc.Here’s a webinar about online methods to find out what your customers really think:
Source: Mike Gingerich via YouTube
Doing this work will help you discover what customers still need from your company. If you segment your audience and can identify paying customers’ interactions with you, it will make it easier for you to identify upsell opportunities.Something else that could help you is discovering anything you can about client companies – especially any changes going on there, like hiring, firing, getting funding or otherwise expanding, changes in focus, etc. If they’re expanding their marketing team, for example, it might mean their marketing organization is maturing, and they might soon be ready for your premium marketing automation software solution.To find out what’s going on with clients, set Google alerts, so you can know when your top accounts are mentioned across websites, follow companies on LinkedIn, and make sure your customer success managers keep in touch with their top contacts at the client companies.
Step 4: Talk to Your Customers (But Don’t Upsell Yet)
According to Derek Halpern, CEO and founder of Social Triggers, a multi-million dollar company, your effort to communicate with existing customers needs to start right after they buy something from you.Specifically, he believes this communication needs to start with the question “Why did you invest? What’s the one thing you can’t wait to take advantage of?”Halpern explains in the following video that, even though we sometimes think we know every possible reason customers buy from us, “there’s always some weird reason why somebody chose to buy something from you, and when you uncover those weird reasons, it can be worth millions of dollars to your bottom line.”As you can see in the video, Halpern explains how you can leverage this new knowledge to gain new customers.
Source: Derek Halpern via YouTube
… but that’s not the only reason.It’s crucial for your team to understand what every customer is looking to get from the product, because it will impact the customer success metrics you’ll set for them, as we’ll discuss in a bit. When you get to know your customers and know what matters to them, it’ll be easier for you to track their progress and identify upsell opportunities that can actually convert into more sales. That’s much more effective than approaching them with a generic proposal that doesn’t align with their own goals. To make your upsell proposal even more accurate, stay in touch with clients and ask them every so often how’s the product working for them and if there’s anything missing, or anything they’d like help with.According to the Huffington Post, “only 1 out of 26 unhappy customers complain” and “91% of unhappy customers who are non-complainers simply leave.” If that happens, you’ll lose any opportunity for upsells.Don’t let that happen to you.Proactively reach out to your customers. When they respond, it might turn into an immediate upsell opportunity if you have an additional product that can close a gap for them. But be prepared for it being “only” an opportunity to improve their experience and results with the current product. Customers value companies that improve their experiences, so making the effort now could open upsell opportunities down the road. Remember, this is a long term game.Now, what if you have tens of thousands of customers?You can still talk in person with your key accounts, but if you want to identify upsell opportunities, strive to find ways to communicate with the rest of your customers as well. Pat Flynn, founder of the $1+ million a year Flynndustries (best known for his Smart Passive Income brand), ran a survey that got 5,000 responses. Through the survey, he discovered, for example, that 80% of his audience of entrepreneurs and wantopreneurs earn less than $500/month. That clearly impacts what products he can sell and upsell to most of his audience. But he also discovered which segment of his audience was open to which type of communication, and which types of products – including who would be willing to pay $1,000 for 1 day of in-person mentorship.
Step 5: Define Customer Success Metrics and Benchmarks
Once you know what matters to customers and what they want to achieve with your product or service, make sure they know what success looks like. Then, break overall customer success goals into milestones, to help you see where you can help along the way.Some milestones will mean they’re ready for an upsell. You can approach them and say that this is when most of your customers choose to add this or do that.Other times, if you see customers aren’t reaching their success milestones in a reasonable time, you could check in with them and see how you can help, to ensure their success, so they can reach upsell-worthy milestones. Alternatively, if you have an additional product that can help right away, it might be a proper upsell opportunity.Either way, Greg Johnsen, CMO of GT Nexus, which processes $100 billion a year, told Cornell University that he recommends that companies encourage customers to be the ones that define their success metrics, so they can own them, be proactive about them, and increase chances of reaching them:
Step 6: Ask for the Upsell
Chris Sanderson was once a realtor that needed to show a house to a couple. He wasn’t excited about the house, and couldn’t imagine who would possibly want to buy it. He assumed the couple felt the same way.But then he asked for the sale anyway – and this is what happened:
Source: Chris Sanderson via YouTube
You already have the “no” if you don’t ask. Sometimes, the best way to identify an upsell opportunity is to ask the client for the sale.
Bonus Step: Get Your Team Ready for Growth
Upselling is not just about growing revenue. It often means a greater volume of work for your company, or a higher level of service to premium customers.When you decide to step up your upselling game, analyze your organization, employee availability and skill, and cross-departmental collaboration, to ensure you can serve upcoming customer needs, keep providing stellar customer experiences, and preparing the foundation for your next stage of growth.How do you identify upsell opportunities? Share it with us in the comments.