Expansion into your customer base comes in two primary forms:

Growth in license count OR new products/add-ons

In this article, we will be focused on new products or add-ons — and will provide the steps and measurements needed for a successful customer success upsell strategy.

Customer Success and a cross-sell/upsell motion are often at odds in SaaS organizations.  For a CS team in SaaS, one of the main priorities is to retain customers in order to maintain the recurring revenue stream. The Customer Success Manager (CSM) charged with churn prevention and account health is the person that owns the day-to-day relationship with your clients. That manager will often be measured on logo retention or holding a low Churn Rate. They typically have built up a meaningful, strong, and trusting relationship.

Out of fear of damaging these relationships, the CSM will often wait until the customer comes to them with a problem before they introduce other solutions in the portfolio. Relying on this reactionary pathway as your only source of upsells will leave you with lethargic growth due to a lack of opportunities being generated. A CSM needs a compelling reason to proactively reach out and introduce new solutions to their clients. You can create a compelling Customer Success upsell scenario by providing customers with a plan, the tools to be successful, and goals they can attain.

Having a solid plan to go after specific targets within your account base must be well thought out and planned, just like you would do in anticipation of a product release. 

So how do you get your CSMs to have more proactive conversations with your customers? It starts with a clear goal.

NO: “We want to increase spend in our account base” is not a goal that will get you there.

YES: “We want 50% of customers who have purchased product X as of Q1 2022, to also own product Y by the end of Q1 2023.”

By identifying a clear targeted audience, product set, and date, you can flow that goal down to the specific account owners and set expectations for the Customer Success upsell strategy.

The pre-work is crucial here. You must work with your Sales, Marketing, and Product teams to determine the WHY behind this purchase.  What does the combination of X+Y do that just X can’t do by itself?  Why do those products go well together? The deliverable from this exercise should be a specific set of discovery questions to be posed to your product X buyers that will open up the conversation to ownership of product Y. 

Determining the offer or pricing that you would give to these customers can, and should, be lower than the cost you would sell product Y on the street to a new customer. There are two main reasons for this:

1. The customer needs to feel like they are getting a great value and that you are rewarding them for being a customer with special pricing.
   
   
2. Your employee charged with pitching this product also needs to feel that they are offering something special to their clients to get over the resistance.

Your costs on these add-on products carry a much smaller cost of acquisition (CAC for you CFOs out there) because they are already customers and you are increasing the lifetime value (LTV) and recurring revenue. 

Armed with your sales tools and special offer, you need to pull together your target list and get the Customer Success upsell initiative launched.

• Step 1: Pull all the accounts that own product X.
  You may want to consider excluding any customers added within the last 60-90 days as they are likely still realizing value from their purchase of product X.
  
  
• Step 2: Look at all the accounts that own both product X and Y.
  
  
• Step 3: Divide those accounts into groupings by assigned CSM (or assigned sales reps) & calculate the current baseline percentage of X+Y penetration. 
  Was the goal you set high enough?
  
  
• Step 4: Determine the total potential revenue from this effort if successful. 
  How many dollars in recurring revenue will you add if you get from your baseline penetration percentage to your goal percentage (50% above)?
  
  
• Step 5: Determine how much you can pay your sellers for this effort.  
  You can do it by a lump sum payout if they hit their goal percentage OR (recommended) give them a payout on each account they close, with a significant kicker if they hit their goal. 
  
  
• Step 6: Tag the target accounts (Have product X, but not product Y) for visibility and reporting for commissions. Many companies use native campaign tagging. 
  
  
• Step 7: Create leading & lagging KPI dashboards or reports that can be filtered by the tags you set up in step 6 to track calls/emails into those accounts.
  
  
• Step 8: Enable your CSMs with the sales tools, special offer, and commission structure. You should also share how they will be tracked and monitored — you may want to consider gamification. 
  
  
• Step 9: Monitor progress by having activities tracked on the target accounts. ask the managers of the assigned CSMs to cover the activities in their 1/1s and create momentum by sharing success stories.
  
  
• Step 10: Measure success & gather feedback after the time has lapsed.  

How did the customers respond? What sales tools were missing? Was there any drop in account health due to this effort?  How much revenue was added? Did this effort take time away from other business crucial activities?

Success should be measured by:

• Actual % versus goal

• Conversion rate
  • New X+Y customers/Total targeted customers

• Revenue added

Incorporate that feedback, set the next set of goals, and improve on the Customer Success upsell strategy the next time around!

By developing a clear goal, taking the time to build the tools, and iterating on your success you will continue to get more out of your account base. Go Expand! (and to learn how Nue can help, visit our product page to see how our platform can assist).