10 Upselling Best Practices Every CSM Needs to Know
When I first started as a Customer Success Manager, one of the most challenging parts for me was identifying up-sell opportunities and to grow current clients. There is no doubt that there are so many different upselling techniques. So my goal here is to share the learnings I gained throughout my career in Customer Success regarding upselling best practices.
But before we dive into it, I’d like to get the definitions out the way as there are two different ways to grow your customers, either through upselling or expansion opportunities.
What is up-selling?
Upselling is about encouraging the purchase of anything additional in the same selling interaction. In other words, Upselling can be described as a sales technique where a seller invites the customer to purchase a higher tier of the current services offered.
What is cross-selling?
Sometimes cross-selling or upselling can be used interchangeably. Cross-selling can be described as selling an additional product or service related to an original purchase to generate more revenue. Still not super clear? I get it. So let’s go over an example together to make it crystal clear.
Let’s say a company sells computer software, and it also offers additional employee training for its customers; that would be an example of cross-selling.
To make it even easier to understand the difference between cross-selling vs. upselling, we can dig into examples in the e-commerce/retail industry. Let’s say you got sold to a deal by Apple to get 2 iPhones instead of one because they had a 50% discount on the second one; this would be an upsell for Apple. Now, let’s imagine you ended up buying 1 iPhone instead of 2, but you purchased an Apple Watch along with iPhone, then, in this case, this would be a cross-sell
3 Phases of Upselling
There are three phases of any upsell opportunity from start to finish. Every organization approaches upsells differently, meaning sometimes upsells are fully managed by Customer Success teams, or sometimes, customer success managers only are responsible for identifying upsell opportunities or priming their customers for upsells. Still, the opportunity gets closed by the sales team. In either scenario, identifying and pursuing the upsell opportunity are mainly executed by customer success managers through three phases.
Phase 1: Identifying upsell opportunities (CS) - strategies from 1-8
Phase 2: Pursuing upsell opportunities (CS) - strategies from 8-10
Phase 3: Closing the upsell opportunity (CS + Sales)
10 cross-selling and upselling strategies
1. Identify the customers that are most profitable and worthy of your time
Let's be real, not every customer you manage will have an upsell opportunity. You need to manage your time wisely and identify a select number of customers for an upsell opportunity.
Usage is one of the most fundamental ways to start looking into customers that might end up growing with your offering. The usage data inform you about which accounts have highly active users and could be more interested in learning how you can bring them added value. Make sure to get a notification when a particular customer hits their quota or are close to hitting their usage limits with their current tier. Once they hit that number, you can reach out to them with a sweet short email like the one below:
“Congratulations! You’ve successfully hit xxx of xxx today. You have XXX seats/credits left in your plan. Your Account Executive and I would discuss the options available to help you save in bulk and meet your growing business needs.”
As you can hear from the tone of this email above, it is all about taking advantage of natural usage milestones and giving customers the offerings that are best suited for their growing needs.
2. Take The Time To Understand What Success Means To Them.
Assuming that now you have the list of customers you want to work with on an upsell, the next step is all about having a firm grasp on what kind of success is essential to them. Suppose you had a successful onboarding call with your customer. In that case, you should already have a good understanding of what your customer wants to get out of this partnership, their success metrics, and how they define success with using your product. However, if not, no need to worry. Go ahead and schedule a call to discuss what your customer wants to gain from using your product. Now, this is your chance to explore not only the immediate goals but also your customer’s long-term plans.
The more you know your customer’s priorities, the more customized you can get with your recommendations that can 100% match what your customer is looking to accomplish. By building that trust, you will make sure that the customer knows that you are genuine when you are having these conversations and not trying to sell to hit your personal quota. Make sure that you are done with this step before moving down the line to remind you of the steps to your upselling journey.
3. Use Customer’s Feedback Score to Decide When to Upsell
NPS: Your champions or advocates will most probably share much feedback through different channels through they interact with your company, so to solely rely on your customer calls to get feedback from your customer would be a waste of time. Be proactive and look into how your customers are engaging with the rest of your company. NPS scores are among the most significant indicators for collecting meaningful feedback and identifying what matters most to your customers and the users of the product/offering you have.
Support tickets: Support tickets carry much useful feedback when it comes to products. Customers reach out to support when either they have product-related questions, how-to questions, or they couldn’t figure out to successfully achieve what they aimed to get out of your services. This means that the feedback you are looking for is right there. Let’s say your customer has been requesting a specific reporting type that your product currently does not offer. Your product team recently launched a robust reporting feature that is definitely an add-on service, which can resolve the problem your customer was running into earlier. Boom! Don’t even hesitate and reach out to share the good news. Stir the conversation around the new offerings and get your customer excited about the potential value your service can add.
QBR: Quarterly/Annually Business Reviews create the groundwork to understand what your customers are happy with and request more from your offerings moving forward. As you go through your business review with your customers, your customers will have additional feedback, which can eventually give you all the hints you need to understand what else could be saving time and money for your customers. It is about asking the right questions. You need to make sure that you know their business growth and needs very well to open up conversations that could lead to genuine upsell conversations. At the end of the day, you are not a salesperson pitching another offering, but you advocate for your customers. You are solely there to make sure that your customer can thrive more and achieve more by leveraging your services in scale.
4. Know Your Stakeholders And Be On The Alert For New Users
Customer Success Managers work with many different stakeholders depending on the journey the customer is in from onboarding to renewal. Along the way, there will be users who will be on autopilot, meaning using your services without you even interacting with them at a high touch level. As a successful customer success manager, you need to keep a tab open on the new users signing up to your customer's account and their use case. There might be two types of users in this scenario.
Users from a new department - potential expansion: Great news! Someone from a different department is looking into your product. Please don’t wait for it and reach out. Introduce yourself and ask them if they would be down to jump on a quick call. The thing is, it is less likely for them to know that they may have a dedicated CSM, so be proactive and show them the care of CSM. This will help you understand why they signed up for the account and their purpose in using your product.
Users from an existing department from a different unit - upsell: This is a prevalent case where a new team member gets invited by the admin to check out the team's tools. In this case, unfortunately, admins don't have the time to introduce the new user to the dedicated CSM. It happens! Again, be proactive and drop a line to introduce yourself and understand this new user's role and how this new user will engage with your product moving forward. Is he there to manage a whole new program? Does that mean that this new person might need more room/seats to leverage your offering? Regardless of how your pricing works, you can cater the questions accordingly to get the most out of that call to validate any upsell opportunity on the go.
5. Discover New Use Cases, Think About Problems And Offer Solutions That Map To Products
You might be wondering why new use cases can create great upsell opportunities while your customer already has a concrete use case. Well, nothing stays the same, and interests change. By providing different use cases to your customers, you offer them a glimpse of the possible ways of leveraging your offerings. This way, you can inspire them on how your customers can take advantage of the industry's best practices. At the end of the day, your customers are not just purchasing a license access/service, but they are also investing in your company for your company's expertise in that field. By your product's nature, you may have different use cases offered across various industries.
As a product expert, you can start building recommendations for your select customers from the use cases you have seen across different industries. They have the potential to grow with your product offerings. There are two benefits of doing this exercise: the first one is about establishing yourself as the domain expert and gaining your main POCs & stakeholders' trust. The second is about motivating your customers to take new initiatives to beat the competition in your field. You don't have to go into the weeds, but by simply saying, "Hey there, I have noticed that you do offer XYZ services powerful representation in the XYZ industry through our customers in the XYZ field. So, I wanted to share some of the best practices we have seen so far". This way, you are setting yourself up as the subject matter expert and encouraging your customer to think outside of the box, which eventually leads your customers to think creatively about your offerings and think about the potential use cases out there.
What if you don't have any recommendations? Do your homework and check out your customer's offerings. What do they do? How differently can they benefit from your services? Do they have a whole new product offering? Are they expanding into new states/countries/regions? What does this all mean for you and your customer's growth? Please do your research and ask the right questions, which will show your customers that you care about your customers and invest time in knowing more about their business. In return, you will get great insights to nurture your customers into upselling.
6. Know Your Products Ins And Outs
Product knowledge: To identify upsell opportunities, you need to do a lot of internal product training on top of knowing what success means for your customers. Without knowing your product offerings' ins and outs, and how your company differentiates itself from the competition, your chances of identifying upsell opportunities or offering new products as a solution won't be very successful. So, what do you need to do to get there?
Study different personas of your product buyers: Learn more about all the types of customers/personas who decided to buy your product. If your company has already done some research on the product marketing or marketing side, you probably should have this ready internally. If not, no worries. Do a persona map and list all the needs, habits, and struggles of the current customer personas you have. This will help you put your POCs into specific categories that will come in very handy when you have upsell conversations. You will be one step ahead with that particular industry/persona combination, which will allow you to choose specific pain points in the industry and how your services can help your customers tackle the particular difficulties they are facing.
Practice how you bake the upsell conversation into your calls and engagements with existing customers: You can think of this step as the real-life practice of step 1. After studying the personas and different industries you cater to, you need to practice your upsell conversations. Start with small steps and take a few select customers in one specific sector; this way, you can nail your pitch in one field and apply your learnings from that pitch to a more general approach that could be used in other industries.
Ask for help! You feel like you are taking too much time, putting you behind with your CS team's goals. Don't wait for a second, and ask for help! When it comes to pitching a new or existing product, the best people are the top-performing salespeople in your organization. Ask them if they feel comfortable inviting you to call or share a recording of one of their best pitches. This way, you can learn from their experiences and approaches. Coworkers in the sales department who have been in the company for more than 2-3 years have an excellent grasp of the customer profile they cater to. At the end of the day, upsells are a great win for both CS and Sales. So don't hesitate to partner up with your Account Executive to get better at your upsell identification process.
Familiarize Yourself With Product Roadmap: Product roadmaps are a great collection of your compani’s short term vs. long term commitments when it comes to enhancing your product offerings. Some add ons or feature upgrades are the major differentiators between different tiers offered in the SaaS world. As a CSM, you need to be 100% clear on your product team's vision regarding certain features that could be an interest to your customer. As of now, you should already have a list of feedback from your list of promising accounts you are priming for up-sell. Make sure to be on top of the updates that are relevant to the input your customers shared. Match your offerings with the customer's pain points. Try driving value, and excitement! Don't just pitch upgrades that don't connect offerings with pain points. As a CSM, your role is to help your customers understand what the new features/add on services can do for your customers' goals and business needs. This is how you differentiate yourself from sales when you are identifying and pursuing upsell opportunities. You have the advantage of knowing the ins and outs of how your customers are already leveraging your product. Use these insights wisely and connect the dots. Still, have questions on how to do that?
Here is a concrete example for you. Let's say you are selling an email marketing platform, and your existing customer's goal is to increase the number of leads she gets from her email marketing efforts. You have a new feature that helps your customers do spam checks so the emails don't go to spam, but this is an add-on service, meaning your customer needs to pay more to access this new premium feature. So come up with a plan to help your customer get there. Don't forget that the most significant part of your role is to be a change manager.
Make it easy for your customers to understand the plan to see where their money will be spent and how it will contribute to your customer's business's overall success by purchasing an upgrade.
7. Be In The Look Out For Your Customers In The News
This is a practice I have been following since the beginning of my overall professional career. Regardless of your role, it is definitely crucial to follow your company's essential stakeholders in the news, such as customers, investors, partners, and anyone necessary to keep your business running.
You might be asking yourself, but how is this relevant to Customer Success and upsells in general?
There are three types of critical information you should be on the lookout for when it comes to customers in the news.
IPOs
Acquisitions & Mergers
Strategic Priorities or Changes such as Global/Regional expansions or large numbers of hiring/layoffs
If your customer is going through an IPO, this means there might be budget increases and shifts in the way they invest in software offerings overall. So bring it up in your next call with your customer and ask how the IPO will impact his/her department and should you expect any changes on her/his usage of your offerings.
The same goes for acquisitions and mergers. If your customer had a merger recently, that might mean growth for his/her department, which might indicate an upsell opportunity for you in the long run. Again, don't shy away and make sure that you are curious about these changes' impact on your customer.
Pro tip: Create Google Alerts to receive weekly email alerts to your inbox. This way, you don’t have to go through all of your customers manually. Google Alerts does it for you. Are you also a productivity junkie like me? Then categorize these emails and label them as “Customer News” so you don’t miss them among all your customer comms.
8. Be Transparent With the Procurement/Legal Team Or Your Decision Maker Before The Renewal
This one is a bit tricky and might not apply to each of your customers. As small to medium businesses mainly go through finance to review/sign off contracts. Still, the medium to Enterprise level customers might have a procurement team reviewing all the deals coming through different departments. So what does that mean for you?
If your customer isn't leveraging your product to the fullest, don't shy away and ask procurement if they know any other departments/teams who can make use of your services. As they review many contracts, they may know what other groups are using to solve specific business problems.
Bear in mind that finance and procurement teams are all about making sure their company gets more bang for their buck. You can use an upselling script like this "Do you happen to know if there are any teams at XYZ company who might benefit from using XYZ product offering you currently have access to?"
So you asking about these questions to help them save more will definitely help you get more insights into the potential upsell opportunities out there.
9. Timing Is The Key
By now, you might be thinking, "Ok, now I have the list of customers I want to prime for up-sell, so what's next." Well, let me tell you what's next: planning for upsell opportunities to arise. Timing is one of the most critical factors of any upselling technique.
Once you have the list of customers you want to pursue an upsell with, you need to make sure your customer is on the right track in their customer journey. Considering the major customer journeys from onboarding to renewal, we want to make sure that we time upsells with milestones.
Of course, you wouldn't want to overwhelm a customer who is onboarding with your product, which hasn't seen the success or any project coming into fruition, so this is not the best time to chase any upsell. Make sure that you approach your list of customers after the completion of a successful initiative with your product or a significant milestone (e.g., reaching a new lead generation goal), take the chance to step back and ask your customer, "What's next?".
Sometimes, your customers might not be transparent regarding the milestones they achieved with your product. At the beginning of the customer journey, it is super essential to set and track measurable goals for your customers' existing service. There is no doubt that nobody will invest additional resources into buying more from your business until you've proven that your product can deliver tangible results for their business. So the quicker the wins, the faster you can open up these upsell conversations. Check out The Ultimate Guide to Account Strategy Planning, where I share my learnings into building a robust account strategy, so you have a clear guide that can help you retain and grow your key accounts.
10. Use Social Proof To Pursue/Convince The Upsell Opportunity.
There are a few ways to go about leveraging social proof to convince your customers into an upsell that will benefit their business.
For example, if you know the percentage of customers that use the add-on product in addition to the product the customer has already purchased, make sure you have these data points to share with your customers. Did your company receive a customer review recently about this specific offering? Perfect, share this with your customer to see the experience of your customers first hand.
In addition to sharing reviews, sometimes, you might have customers that ask for more than reviews. The best option you have here is to introduce a select list of your current customers who are happy with the offering you are pitching to a new customer. Again, this requires a bit more effort as you would need to email the list of your current customers and get their consent to be introduced to your customer who is evaluating the offering currently. But this is also an alternative, knowing that social proof is an influential, convincing factor -- so don’t shy away from any initiatives that can help your customers gain confidence in your offerings.
Useful Resources
More about cross-selling and upselling strategies
Upsells vs Renewals: Who Owns It?
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