When we think about the typical profile of a salesperson, we see them going after new customers, pushing hard, and closing the deal. But if you run a sales organization at Software-as-a-Service company, a good portion of your revenue growth is going to come from existing customers who are looking to increase their value with additional products or services. And when it comes to up-selling or cross-selling your current clients, a slightly different approach is required.
Up-selling is the backbone of most SaaS business strategies. Typically, customers join with a free or basic plan, and then as they realize the value of the product, they discover the need to extend their usage and functionality.
Of course, increasing revenue is a key argument for emphasizing up-sell and add-on opportunities, but another important reason is decrease churn and increase retention.
Up-selling lowers your churn rate and lengthens your customer life cycle simply because a customer that has paid for a better version of the product is more likely to continue using it.
You might not need a dedicated add-on sales team to take care of your up-selling opportunities if each tier of the customer plan is only differentiated by increased usage levels. But if your company offers a variety of modules, plug-ins, or packages that significantly augment the value to the customer, then you might need to commit specific sales talent to the task of demonstrating that value. The key to a strong add-on sales team is sensitivity. “If it isn’t a fit, it isn’t a fit,” says Kevin Karner, the Head of Customer Growth at Drift. “You can’t be traditional and push for the close, because you might scare off the customer.
But if you have a team that monitors how the customer is interacting with the existing product, coupled with other data sources, you’ll start to see opportunities to offer add-on functionality.
In order to support a dedicated team for up-selling, you’ll need flexibility in your Sales Performance Management solution. Book a demo of Obero SPM to see how agile your sales organization can be.