Up yours, Customer Success Managers. Hey, I’m referring to Upselling!

August 26, 2015 Jodi Schechter

Up yours, Customer Success Managers. Hey, I’m referring to Upselling!

Ever try to explain to someone what upsell means? Next time just ask them if they “want fries with that”. That oughta do it. Arguably one of the most recognized promotional tag lines of our time, I’ll bet that people don’t realize the McDonald’s suggestion is pure, shameless upsell.

If you’re a SaaS company and you think that acquiring a customer and successfully onboarding that customer is enough to be successful, you’d be mistaken. It is crucial—but it’s only half the battle. The other half involves combating customer lifecycle complacency with two powerful tactics: upselling and cross-selling.

If upsell is fries, then cross-sell is fish

Upselling, defined by BusinessDictionary.com as a sales strategy where the seller provides opportunities to purchase related products or services, is key to expanding the breadth of usage and value demonstrated to your customer. Opportunities to upsell generally include expanding customer seats (number of licenses) and introducing compatible add-on features. Recurring revenue from upselling is typically smaller in size than the original contract.

Upsell is the order of fries you add to your meal.

Cross-selling, encouraging a customer who buys one product to purchase a related or complementary product, is an opportunity to sell new products or secure new divisions of the company to subscribe to your solution. Revenue generated by cross-selling can often exceed the value of the original contract.

Cross-sell is ordering a filet-o-fish on top of your Big Mac combo.

Why should customer success managers handle upsells?

Respected Customer Success Executive, Paul Teshima, who built and scaled a venerable customer success organization from 0 to 100 people at Eloqua, differentiates between the two this way:

Upsell = Usage + Value  (Customer Success Managers)
Cross-sell = Value + Selling  (Account Managers)

He maintains that upselling is the domain of customer success teams, while cross-selling should be handled by sales account managers. Here’s why:

Customer Success teams exist to demonstrate value through product use, and in doing so, not only protect monthly recurring revenue (MRR), but are perfectly positioned to expand it. By broadening use cases and growing the number of licensees, upselling directly impacts the bottom line.

To underscore the importance of upselling on customer adoption, customer success managers’ variable compensation should be tied to upsells, advises Paul, as well as being responsible for securing subscription renewals.

Ensuring your customers’ satisfaction and success throughout the product lifecycle is critical to customer retention and renewal. Both upselling and cross-selling are important elements in demonstrating ongoing value and protecting revenue…but leave the fries to your customer success team.

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