There is a treasure trove of revenue hiding in plain sight.
Who is this revenue coming from? I’ll give you a couple of hints: Your account managers already talk to them and there is a 60-70% probability that you will close the deal. Looks like the odds are ever in your favor.
That untapped market is your existing customer pool. The truth is, when they became customers they had a certain set of needs, and now those needs have shifted and grown and they could be in dire need for an upgrade. They could actually be contemplating ending their service from falsely thinking that your company does not provide what they need.
Many would benefit from additional products or services, but it’s not as easy as sending blanket email campaigns, essentially asking your customers to spend more money with you without any consideration of their needs.
Kevin Karner, Head of Customer Growth at Drift, a creative communications tool for businesses, talked with us about his experience of selling customer upgrades while working at HubSpot. He shared his three secrets to increasing upgrades, revenue, and customer satisfaction.
1. Determine Who is the Best Fit for an Upgrade
In HubSpot’s case, one of the available upgrades was a tool that gave the user an ability to host their whole website inside the marketing platform. Of course, such a hands-on solution wasn’t appropriate for every customer, so Kevin and his team used key indicators like product tracking and content engagement to determine who would benefit from this tool.
By following content engagement, for example, Kevin had an easy view of who was already searching for related content, like web redesign or improvement, which would then trigger an upgrade push to only those customers. Narrowing your upsell scope to viable customers saves time and resources and makes the interaction more personal. Narrowing your upsell scope saves time and resources and makes the interaction more personal.
It could look like a tailored pitch for a specific upgrade or it might simply be respecting your customers enough to know who not to contact, as they would only view your pitch as irrelevant and a waste of time.
2. Marry Customer Service and Sales Into One
Asking people to spend more money than what they are already paying you can be a delicate mine-field to tread.
Approaching from a sales perspective has the potential for a biased, commission-driven attitude, while the customer’s account manager might be hesitant to strain their relationship by offering another service at a cost.
HubSpot recognized this gap and created a role for Kevin that married the sales and customer service/success departments. He was tasked with working internally to identify which customers would benefit from an upgrade. He could then take that list and contact the customer with an offer and a tailored pitch as to how they’d benefit from it.
The combination of genuine customer care and still wanting to upsell means that, while your goal is to increase revenue, your method doesn’t have to be dollar-driven. Your motivation can be to provide the best solutions to customers who are looking for a change. Your motivation can be to provide the best solutions to customers who are looking for a change.
3. CHOOSE THE RIGHT CHANNEL
There is no one-size-fits-all solution for how you package and present your customers with upgrade opportunities.
If your target customer is already receiving consistent emails from you, an email can easily get ignored, but if the customer hasn’t subscribed to you yet, a personalized email from their account manager could be a success.
Just like you had to determine who your target audience is, it’s worth taking a few moments to determine the best method of reaching out to them. Here are a few ways Kevin suggested:
- Place a call to action on the customer’s dashboard
- Create an in-app notification
- Reach out on social media
- Use a communications tool like Drift
Whatever channel you choose, your end goal is to present your customer with the opportunity to upgrade in such a way that they see the benefit and can’t miss it.
Research into SaaS companies’ rate of growth shows that the fastest growing companies are the ones with the higher rates of customer upsell. In short, upgrades grow businesses.
Even if you can’t afford to restructure or add a new team member dedicated to customer upgrades, get your account managers, marketers, and sales team together to identify your target customers and brainstorm the best ways to reach out to them.