Salespeople aren’t the only ones closing deals these days. Customer success managers’ (CSMs) roles are focused on helping customers, which in turn creates loyalty and a more successful business.
Customer Success professionals can help their companies succeed even more by cross-selling and upselling. Companies put cross-selling and upselling strategies into effect to increase the sales of their existing customers.
As you can probably guess, current customers are a lot easier to sell to (60-70% easier) compared to a new customer (5-20% to be exact). Customer success managers are in the best position to cross-sell successfully because they already have a close relationship with their current customers and know exactly what their needs and wants are. When CSMs have a strong relationship with their customers, it results in having strong customer health and overall success.
So what’s the secret to successfully cross-selling and upselling? Making the most reasonable and appropriate offer to the customer, depending on where they are in their life. Part of knowing how to properly upsell and cross-sell current customers is understanding how they use, enjoy and interact with your product. If you don’t have this all important data, it will be harder to sell them other products or additional usage, because you simply won’t know if they are happy with the ones they already have.
CROSS-SELLING VS. UPSELLING
Cross-selling is a technique of convincing a customer to spend more money on a previous purchase for accessories or “add-ons” that compliment their existing purchase. Almost 35% of Amazon’s sales are a result of cross-selling.
In order to cross-sell, you must think about which products mesh well. Think a burger and fries or a jacket that pairs well with a dress from a retail store, both compliment each other. Whether B2B or B2C in nature, software (even free software or SaaS) is constantly using cross-selling to increase its client base.
Upselling, in contrast, is a popular strategy in many industries. Upselling is a way to try and increase sales by convincing customers to upgrade their purchase to a more expensive one. A tip to successfully upsell is to ask the customer who already has their heart set on purchasing a new product if they would be interested in purchasing that product with additional bells and whistles for only a small increase in price. Above all, your customers’ wants and needs should be your main priority.
Of course, upselling is far more effective than cross-selling. According to Econsultancy, upselling can generate up to 4% of sales, whereas cross-selling generates approximately 0.2% of sales. The difference between the two techniques is unreal, as much as 2000%. Here are ways you can implement both cross-selling AND upselling to ensure your clients take advantage of every option you can provide.
TEST DRIVE NEW FEATURES WITH LEGACY CLIENTS
Everyone can agree, it’s never a walk in the park when it comes to introducing a new product or service to everyone at the same time. There is a learning curve and a number of different factors that need to be worked around your strategy before reaching out to new customers. People are rarely fans of change and introducing new product lines or features is change management on a whole new level, even when the change in the product is for the better.
Take a test drive of the products or services you’re going to try to upsell or cross-sell on the customers you currently have. First, if you present it to them correctly, these customers will feel valued by your organization. Especially if you remind them that this is an exclusive beta only for specific legacy clients. Additionally, you know these are the people who are loyal to your organization, so they will provide honest input. Ask them a variety of questions to get a feel for what kind of approach you should take with the new customers.
Getting valuable feedback and information to use from loyal customers is the best place to start when it comes time to cross-sell and upsell.
ALWAYS EVALUATE YOUR AUDIENCE
Before you pick up the phone or press send on that email to a current customer, it is crucial to evaluate what you are offering and match it to where your customer is in their life. As a result, you’ll have a better idea of their challenges and the products that will be the easiest to upsell or cross-sell.
To avoid the risk of ruining the relationship between the customer and your company, tailor your suggestions to the customers’ needs and wants. Always keep your ears open and listen for cues that will guide you to their unique need and how your product could solve it. One way to do this is by having a customer dashboard that tracks usage, support tickets, complaints and general client health. Customer success software can do this for you and support your customer success plans. This is the first step in evaluating your customer base and knowing where, when and if to offer them a new product.
KEEP IT TRANSPARENT
The more upfront and honest you are with your customers, the more loyal they will be and continue to give you their business. Honesty and integrity are essential factors when it comes to customer loyalty and retention.
You should always focus your efforts on being transparent with your customers, in order to avoid any issues that arise during a cross-sell or upsell and result in negative churn. Being 100% clear about what is in their contract and how much something will cost them will prove they are able to trust you and that will create a strong relationship between you and your customer. Openness and trust will also create possible referrals, less stress and overall a more successful business.
If a new feature of your product won’t work for them, or is unlikely to transform their business, that doesn’t mean you can’t call them. It simply means, when you let them know about your new product innovations, you tell them whether or not you think it’s right for them.
BE BLUNT ABOUT THE VALUE
Okay, so the cross-sell or upsell for your customer was successful…so you’re done. Move on to the next customer. Right? No. You need to inform your customer of the value of the additional product or service. In order to do this, you will need to explain how the additional service or product would be of use to them.
Do they hit their usage cap every month? Are their support tickets always ending up with a development quote? Knowing your client usage of your product is crucial during this process. When you can see a snapshot of what your client is doing in the environment of your software, you’re far better armed to speak to the value your new feature or product will provide them.
You can also use positive reviews from current or previous customers, quantifiable results from case studies and recommendations or referrals. Making the value of the product or service clear is always needed so the customer is able to make their decision without any help or further explanations.
RETENTION? REWARD IT!
Have you realized the full revenue potential of your existing customers? According to a white paper from the CMO Council, 77% are not, 13% responded yes and 10% of respondents weren’t sure.
Increasing customer retention rates by 5% increase profits by 25% to 95%, but this strategy must be implemented only after considering the return on investment (ROI). If it does not give a good return on investment, then it would eventually prove to be a loss for the company.
When a customer makes the decision to stay with your company and increase their spending on products or services, make sure you show your appreciation for their loyalty. This is where customer loyalty programs come into play.
Customer loyalty programs are offered by many different companies, in many different industries, to give or show thanks to their devoted customers. These incentives can include sending a simple thank you email, discounts on future purchases or services or even free products.
Increase revenue, grow your business and increase customer retention. All things companies wish and hope for, so it sure would be a shame not to utilize the techniques of cross-selling or upselling. Cross-selling and upselling are two of the easiest ways to take your company to the top.
