What is Upselling & 5 Steps to Upsell Any Product or Service Successfully

Upselling can be a great way to take your company from growth to hypergrowth. So in today’s article, I’m gonna be sharing with you exactly what is upselling as well as some tips and tricks that I’ve used in the past to upsell previous customers.

What is upselling?

So the first things first is to understand what is upselling. Upselling is the process of taking an existing customer base and essentially selling them on other services or products in order to increase their overall spend. By doing this, you are naturally upselling them in which you are selling them upwards of what they originally purchased from you.

I’m gonna talk to you about this in the context of a few different examples, but let’s say for example, just if you were to go into the store. If you’re going into the grocery store and you’re doing your checkout and doing your thing from there, you notice that maybe there’s some candy on the aisle right before the cashier.

And you pick up one of those pieces of candy in order to add it to your cart. Well, congratulations. You just got upsold. And that’s pretty much it, or in the case where maybe you were buying a SaaS tool and then there was a feature that you realized you really needed after talking to a sales rep. So the sales rep from there got you to be interested in that particular feature set and you ended up in that respective tier of product and in that particular example you got upsold.

Step #1: Which customer or group do you want to upsell?

So now that we know what upselling is, let’s talk about exactly what are some effective ways to upsell customers. The first thing I recommend when it comes to targeting upsells is to really pinpoint what group of customers you want to pitch the upsell to. In other words, you shouldn’t just send a campaign to every single one of your past customers asking for an upsell.

The reason is simple. If a customer hasn’t used your product in the last six months or so there is no reason for why they would have any interest in buying more services or products from you. And so the first thing you wanna do is create a hit list in terms of potential customers to upsell. For this, I recommend using a few different criteria. Some common ones I’ve used in the past are the ones who I have the best notes about the decision making trees, because I know exactly who I need to influence in order to get them to open up their budgets a little bit more, or also to take a look at product activation.

In the case where you’re selling some sort of SaaS tool, like I often do you’ll wanna look at the key activation metrics. How often are they logging into your site? When was the last time they logged in? What are some of the high usage sort of factors that you can consider for your business, that signal to you that this user is a really good power user to talk to.

And then some other considerations are things such as if you know their budget cycle. In the case where you or your sales team did a good job in qualification, you should have written down some things around BANT, which were budget, authority, needs and timeline. So in the case where you know that there is a pocket of your customers where their budget is due for renewal, what it means that they’re potentially gonna have more discretionary funds to spend on your services than potentially at another time in the year.

Once you have these sorts of criteria in place, what I recommend you do is you figure out what is manageable for you in terms of the scope of your upsell campaign. In the case, for example, where your team is really small, you might only get to sharing this upsell campaign to a third of your customers. That’s totally fine, but whatever it is, make sure that it’s manageable for your team.

Step #2: Craft your messaging and your positioning

The second step from there is to craft your messaging and your positioning. When it comes to positioning, what I recommend when it comes to upselling is to think about ways that you can package new value to your existing customers.

So here’s an example, let’s say, for example, that you are selling a tool where people are trying to use your tool for general CRM management purposes. And what you realize is that in your latest release, you now have direct ways for integrations to Google calendar or general productivity tools such as Asana or Trello.

Well, in this case, what you wanna think about is what are some of the benefits that my existing customers can stand to gain from potentially using these integrations. Then from there, start from the point of the benefits as opposed to selling the features. In other words, instead of just sending a campaign, that’s like, “Hey, we have some new direct integrations to Google calendar, Asana and Trello”, start with wouldn’t it be cool if you could X, Y, Z directly save time in creating your to-do list for this entire week or month.

By focusing on benefits, as opposed to features, you will start to craft a narrative with your existing customer, and they can start to think about the different ways that this particular upsell is going to, or not going to meet their needs.

And the reason why this is so important is because too often, I find a lot of people when they’re trying to upsell their existing customers, they rely way too much on their customer to connect the dots in terms of the benefits. In other words, they pitch the feature, but they don’t actually talk about the benefits that someone stands to gain from adopting those features. So when in doubt, think in benefits and not in features.

Step #3: Make sure that your campaign is comprehensive

Assuming that you’ve done that, the third step that you wanna do is you wanna make sure that your campaign is comprehensive. What I mean by that is whenever I’m doing some sort of upsell campaign, I make sure that there’s both written as well as live communication opportunities to upsell a customer.

So if, for example, I’ve isolated, my list of potential existing customers to upsell, what I might do is I might invite them to a live workshop where I’ll teach them about different ways that they can improve their adoption of my respective tool. And then what I’ll do from there is I’ll craft an actual presentation that might be an hour long, where I teach some super user stories in terms of the different ways that people are using my app.

And then from there, what I’ll also do is I’ll work in different ways to talk about some of the higher tier plans that my super users already use. And this will naturally pique the interest of the people in my upsell campaign, because they’re going to likely want to also unlock these sorts of features. The reason why is because I pre-qualified them in step number one, in which I know these people are likely gonna be more likely to be good people to upsell who care about these particular feature sets.

And then from there, it’s a matter of giving them some sort of unique offer. And when it comes to pitching from multiple angles, what this often means in my world is at the end of my workshop, where I have people sit in live, I offer them something like a two-week free trial of the tiered above where they’re currently at.

From there, it gives them immediate value and adding new value to them because I’m allowing them to try this higher tier plan, completely risk-free. And I am mitigating any concerns that they may have about potential pricing until a further point in the conversation. In other words, I’m giving them an opportunity to really experience the benefits that I’ve just pre-sold throughout the presentation before I actually ask them to open up their wallets to buy more product from me.

Step #4: Setup multiple ways for customers to engage

And so what I’ll also do from here is I will have a series of follow up emails that I’ll send to both the attendees, as well as the no-shows to this live work. By doing this, I give them multiple ways to interact with me, where maybe I have somebody that’s more active and more of an extrovert that wants to actually talk to me live in the live session whereas I have other customers who are more introverted and they don’t wanna be put on the spot in these live workshops.

By offering these different channels of communication with your customers, you give yourself more opportunities to actually successfully upsell them. I recommend that you always have some sort of written as well as live opportunity for your customers to be upsold when you’re running an upsell campaign.

I ran an upsell campaign in Q4 of last year when my company released a higher tier plan and we were able to convert over 50 customers from just a live event itself because it was focused on giving meaningful and actionable value to our customers, as opposed to just sending out a single email that was like, “Hey, we’ve got a new plan, please upgrade here”.

So step number four is make sure that you have multiple ways for your customers to actually engage with you on the upsell.

Step #5: Package an interesting and unique offer

And the fifth thing that I always recommend when it comes to upselling is to make sure that you’ve packaged an interesting and unique offer. Your offer needs to be something where it is too good to pass up. The way I’ve done this in the past is I have capped the number of customers that can get a unique timebound discount.

So for example, what I did in Q4 of last year was I told folks, “Hey we are offering a two week free trial of our, leveled up plan here. You’re gonna have complete access for the next two weeks, but while you’re figuring that out, what I recommend you do is in the case where you get value from that two week trial, definitely get your upgrade in because here is a unique offer that will only be offering for the first 10 customers that use this specific code and the offer expires at X date”.

By doing so, we increase our chances that there’s actually gonna be a clear outcome from our upsell campaign and that we can actually track towards our goals since the person is likely going to act a little bit more hastily in terms of getting to the key stakeholders in pitching through this particular upgraded plan.

Same thing goes when it comes to, if you’re selling more traditional services in which what you wanna do is make sure that you always have some sort of timebound component or scarcity element in order to make sure that you are getting your customers to really prioritize this offer.

Sometimes you’re not gonna get the offer perfectly. But what I want you to do is I want you to think about, is this really a heck yes offer? If you don’t get that sort of raw reaction from the offer that you’ve created, then what you can do is you can either talk to a few different customers and ask them what they would like to see, or you can just continue testing different variants of that offer until you get that immediate response where when you send it to, for example, 30 customers immediately, people are responding to you within the first few minutes of you sending it out.

That’s when you know that you have a really money offer in terms of the things that people care about. Aside from these five steps, when it comes to upselling, what I recommend you do is that you also build up an operational cadence for when you’re going to upsell your customers. It’s really useful. For example, after positive customer interactions to potentially working a few days of a delay and then circle back with that customer that just had an awesome interaction to potentially explore the different ways that they could use your tool further. And this is the sort of way where you’re building on the positive momentum and experience that they had with your company in order to lead you to the next upsell opportunity.

It’s really great to build that in, and then in terms of other things in operational cadence, I recommend you at least upsell your customers two times a year. At least once every six months, you should be offering some sort of new value to your customers and moving them upstream. If your customers are paying you the same thing that they’ve paid you from several years ago, you are stunting your company’s growth.

What you can do is you can start creating a metadata tag in your CRM to know exactly when the last time that you reached out to that customer on an upsell offer exactly was. And from there, you can start to package different things, invite them to the next workshop that you put together or whatever it is that you use as your mechanism to getting to the upsell.

It is really important to operationalize this because you miss out on a ton of revenue if you don’t. At my last company, every single year, we would be renewing contracts because it was on annual cycles. And what our success team was trained to do was as far as six months out before the renewal, we were beginning the conversation on the next year’s budgeting.

And we were already priming the pump in terms of looking at the person’s usage and seeing different ways that they could be expanded upon in their accounts. And most of our growth from the point in which we were at just a couple million ARR to over 5 million ARR was simply because what we did was we consistently upsold on our existing customer base.

For several years, our existing customer base was growing at between 50 and 65% annual growth rates of their prior deal sizes. And the main ways we did that was by selling more product as well as selling more services. So in the case where you potentially are selling a SaaS tool and you don’t have more product to sell, you can also sell services.

You can sell customer success experiences. You can sell more advanced trainings or customized trainings, and that can add to your bottom line as well. It’s obviously not gonna have as high of margins as typical software margins of closer to 70, 80%, but services can often run as high as 50% margins and even in today’s world, because there’s a lot more acceptance in virtual trainings, you can also get some pretty good returns from just selling services in general.

I’ve tested this in the form of onboarding fees, advanced trainings, intermediate trainings, the whole gambit. And what you’ll find is that when you package something that is truly valuable to somebody, they will bite on the offer.

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