Let’s admit to the fact that it is the Recurring Revenue that is going to make or break your business. Additionally, you need to identify the SaaS upsell opportunities that assist in the expansion of this revenue. The three factors that are responsible for your SaaS Revenue growth are-
1. New Customers
2. Retention of existing Customers
3. Saas Upsell to existing customers, which is more or less the direct window to the Recurring Revenue for your SaaS Business. Tracking SaaS upsell metrics can be a major boon to your business.
How do you recognize Upsell opportunities? How to convert the right opportunity into greater MRR?
Upsell, which essentially is derived from plan upgrades from basic to pro to enterprise, and whatever your path might be. The moot question is “How do you drive that? “Are your plans, based on features, or such that with pro you get additional features and then with enterprise, you get even more features, and that’s about it. You will need to figure out if those are the only access by which your customers are ever going to pay you more? Then it’s high time you should try looking for a newer upsell strategy.
We all want to deliver value to the customer. But we also want to create a win-win situation So when your customers are successful, you as a business will eventually get successful. Let’s create a win-win back here for you and your customers. This is where I think we need to explore a lot more than what we are used to pricing a product on. We have seen seats being the most common user base and we’ve seen the feature plan as a more traditional form of dividing your path from basic to the enterprise.
Also, here you can check out the ways to increase SaaS renewal-
How to increase the SaaS renewal rate for a recurring revenue business
Getting to know the right time to nudge customers for SaaS upsell
If you’re only playing on feature access on the planned path, and seats on expansion, you might be extremely limited in ways in which you can actually expand. You as Customer Success might be doing a wonderful job of engaging your customers, of taking them to get more value, but still actually getting frustrated and disappointed because it’s not necessarily translating into more MRR. Let me explain with an example
So let’s say you’re a marketing automation tool. and you’ve helped your customers get to better lead generation, better drip campaigns, better conversion rates, all of that is leading to them getting more leads, traffic going up and etc. But is that necessarily translating into your platform making more money versus before? And if the answer is No, because you’re likely waiting for them to adopt the next set of planned features, or you’re waiting for them to expand seats, which may not necessarily happen or has a very limited scope. I think the point that I’m trying to make here is that you are not able to recognize all the axis on which you want to measure the value delivered.
So this is going to be identical to that axis on which you ideally want to price your product and nudge them to either the next plan or pay extra for the next bucket of that usage. Let me give you more examples, say when you are a marketing automation tool, your upsell opportunity could be the number of contacts, the number of visitors that are coming to your website, and a number of clicks that you’re getting if you’re an analytics tool could be data storage. And if your organization or SAAS company essentially sells API, it could be the number of API calls, and data storage, it could be anything more than just the traditional seats.
How do you identify SaaS upsell opportunity ?
Once your customers realize the value of your product, you need to start digging for opportunities to upsell and cross-sell. Obviously, you just can’t go out and each one of your customers to upgrade or renew. This is where you need to identify the sense of the opportunity and pitch for a saas upsell or cross-sell. Now, for this a baby step could be to idenfity the vitals signs for a saas upsell. Understanding when your customers are ready for an upgrade or upsell and tap into the opportunity.
Translating Customer Success into SaaS Upsell opportunity
So as your customers expand and get more value on any of these axes, you ideally get an opportunity, a window to translate the success that you’ve driven them to achieve by asking them for a fair price on an increased MRR.
A holistic approach to SaaS Upsell
Customer Success is not in charge of devising business plans or product plans, or pricing. So this has to be a very holistic approach. SaaS upsells have to be engineered as they are not going to happen on their own. You need to figure out a process to find out a path. But all of that, do you have the right background? Do you have the right ingredients in your business plan itself, which gives you enough opportunity to actually drive that upgrade? So that you are able to increase that MRR.
Don’t forget to check out the- Upselling strategies that can improve your bottomline!
And to be able to help your CSM s to get that window to upsell, you need to equip them with the right customer success platform that helps them be more proactive.
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Have you figured out another way to drive more saas upsell?
If you’re one of those successful ones who have cracked the secret to doing upsell, please share it with us, we’d love to hear it and share it with the community.
P.S. – The main image has been taken from pexels.com