Longtime customers are the lifeblood of a business. According to Marketing Metrics, you are 14 times more likely to sell to an existing customer than you are to attract a new one. What’s more, acquiring a new customer can cost five times more than simply investing in retaining one you already have.
Upselling to existing customers is essential to growth. But to upsell in a way that benefits both you and your buyers, you need to understand their unique business needs and work with them as a partner.
What is upselling?
Upselling definition: A strategy that involves encouraging a customer to buy a higher-end, more expensive version of the product they’re already using.
Upselling is a sales technique for getting customers to upgrade their purchase in a way that will increase the value of that purchase for your company. Essentially, you are convincing them to buy a similar product at a higher price tag, either because it is better quality or it includes some additional features, licenses, or related products.
But upselling isn’t only about increasing sales and revenue—it’s about helping your customers reach their goals. “Upselling shouldn’t feel like an upsell,” explains Alex Van Divner, a Zendesk account executive who works with customers around the world. “It should feel like you’re legitimately helping them, and they trust you because they’ve built that [relationship] with you.”
Van Divner has learned a thing or two about why some upsells are successful and others flop. He’s found that you should always use discretion when upselling—ask yourself if it’s the right time to make this offer, given the customer’s background with your company and the challenges they’re currently facing.
3 don’ts of upselling
When upselling, knowing what not to do is almost as important as knowing what to do. You don’t want your customer to feel like you’re pressuring them to do something against their will, and you don’t want to sell them something they don’t really need. Use ethical selling techniques to ensure you’re doing what’s best for your customers.
According to Van Divner, you don’t want to sell new features just because they’re new—that is a superficial way of selling a product. It doesn’t get to the heart of the customer’s business needs. Instead, emphasize how the additional features will make your buyer’s life easier and help them reach their goals.
For example, if you’re a SaaS company selling software to another company, think about how your product will improve the lives of overworked IT staff. Perhaps an upgraded plan enables them to easily create in-depth reports that will make them look good in front of their bosses. Or, maybe they will save a lot of time thanks to the new features built into the customer relationship management (CRM) tool.
“It’s more important to focus on what those features do and how they relate to the business,” Van Divner advises. “I would focus on [the customer’s] strategy. If they’re going to grow a lot, show them a product that will help them manage and follow up with new leads.”
Some companies try to coerce customers into upgrading by initially selling them a barebones plan that doesn’t include all the features they require. As soon as they need those features, they immediately realize they’ll have to upgrade.
“I don’t like using this sales tactic because it puts the customer on the other side of the table,” says Van Divner. “It’s a bad experience to be forced to upgrade for just one feature instead of having that feature from the outset.”
Strong-arming only creates friction between you and your buyer. It gives customers the impression that you’re trying to dupe them, placing the two of you in opposition to one another instead of in a partnership where you’re working together toward a shared goal.
Don’t just think about the bottom line. Instead, make sure you offer the essential building blocks your customer needs at the beginning of your relationship, and only attempt to upsell when you identify that they could genuinely benefit from an upgrade.
Overselling a product means promising more than it offers, whether that’s in regards to features or capabilities. Avoid this at all costs—you don’t want to set unrealistic expectations around how your product can help the customer.
For instance, maybe you know that certain features in the upgraded product don’t serve sales teams as well as they do support teams. But you still pitch the product to a sales leader, overhyping the productivity features in order to close the deal. While you might have convinced the sales leader to upgrade, they might be disappointed later on because the product doesn’t adequately solve the team’s unique pain points.
While it isn’t always easy, it’s essential to be honest about what your product can—and can’t—do for your customer.
Plan before you upsell
Upselling helps grow your revenue, but you have to get it right. Use the effective upselling techniques above to support your current customers in achieving their long-term business goals while boosting your company’s bottom line.
Before upselling to customers, map out how their decision to upgrade will positively impact their business in three months, six months, or one year. This roadmap will help guide you as you plan your pitch—but timing is everything.
Use a CRM like Zendesk Sell to keep tabs on where your customer is in their lifecycle so you can suggest the right upgrades at the right time. You’ll soon be on your way to improving customer retention and lifetime value.