Hey CROs!
by Anna-Lisa Natchev
Are you searching for a new revenue-generating strategy in a time of budgetary constraints and dwindling customer engagement?
I hate to break it to you, but the key to revenue growth is (still) not a mystery art or some magic pill. It’s simply hard work and a mindset shift.
This year, we must approach our proven methods differently. Agility and a mentality where we are constantly building, measuring, and pivoting will be essential for making our numbers.
You will have to fail faster and learn quicker as the market is trying to adapt to the new reality of tech layoffs, budget cuts, and pulled funding.
Let’s look at my personal favorite for boosting sustainable ( repeatable) revenue: The Upsell play.
Upselling to Existing Customers
Upselling involves cross-functional sales, customer success, product development, and marketing play.
As a CRO, asking yourself whether you have untapped upsell potential is essential.
· Do you have critical account management plans in place for your top prospects?
· Can you use your existing teams and tools to get upsells?
Most importantly, are your account managers responsible for upselling adequately trained, motivated, capable, and measured on generating upsell revenue? If the “net-new” market is lagging, and customer success is busy putting out fires, putting in the “hunters” to tend to the existing herd is not a bad idea…
In 2023, along with keeping our existing customers incredibly happy, it’s time to start experimenting with tactics that can blow the lid off any untapped revenue potential. I often notice that startups and scale-ups consider upsell revenue as something that “just happens.” There is usually no process, strategy, or responsible team to ensure that the company gets the most out of the hard-earned customer base. CROs should prioritize identifying upsell opportunities and testing with different plans to build, measure and pivot a sustainable process to get the Upsell revenue flowing.
How much upsell revenue could your team potentially sell per day?
Make a calculation and sit down with your Marketing, Customer Success, and Product team, as this is a fun exercise to do as a team. After you have the sum, multiply that by the number of working days left in 2023. Now for all of you in the SaaS business, this is all recurring revenue, meaning that the total value is even more significant.
One of the biggest challenges you might face when trying to generate upsell revenue is navigating the relationship with the product development team and product strategy people. After all, a reasonable upsell potential to your existing client base requires that the solution is modular and that new modules or features emerge from the roadmap.
This means that you must ensure that the product roadmap is aligned with the revenue growth goals and that the product development team delivers the features that will enable upsell opportunities. In short, ensure they are also measured on Upsell Revenue.
Selling a project management tool
Let’s say you are a software company selling a project management tool. Your product is the same across each tier, but you want to experiment with price lead growth to drive additional revenue growth.
You decide to create three different packaged customer journeys: “Small,” “Medium,” and “Large.” The “Small” package includes the tool’s essential features, while the “Medium” package includes additional features such as team collaboration and document sharing. The “Large” package includes all these features plus advanced reporting and analytics capabilities.
By offering these different packages, you can create a sense of value and differentiation that encourages customers to move up the tiers. For example, you might show a discounted price for the “Small” package, with the option to upgrade to the “Medium” or “Large” package for an additional fee.
To make this strategy work, you need to ensure that the features and benefits offered at each tier are compelling enough to drive customers to upgrade.
Arm wrestling can be fun
Ultimately, generating upsell revenue requires collaboration across teams and focusing on delivering value to customers. By working closely with product development and product strategy teams, you can ensure that you provide solutions that enable upsell opportunities and align with revenue growth goals.
Experimenting with pricing strategies and tiered offerings can be a lot of fun and a great way to drive additional revenue growth while increasing the value proposition for your customers.
And hey, if you have to arm wrestle a little bit with the product development team to make it happen, so be it! Remember, collaboration and alignment are crucial to achieving revenue growth success.
Sincerely
Anna-Lisa Natchev
Fractional CRO & Founder of Koppycat- content as a service
Author: CROAdmin
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