Startup sales: Upselling 101

by Steli Efti

Your current customers are the best prospects for future sales.

Yet, very few startups act that way. Whenever I talk with founders, I observe that their thoughts about existing customers are mostly focused on these 3 points:

  • How can we retain them?
  • How can we support them?
  • How can we get referrals from them? (this is a distant third)

If your company isn’t generating a steadily increasing percentage of revenue through upsells to your existing customer base, you owe it to yourself and your business to set 10 minutes aside for this post.

Before we dive into the how and why of upselling, let me address one thing first:

Upselling isn’t evil (although some companies make it so)

Think upselling is a sleazy business tactic? I'm not surprised, because the most memorable experiences we have as consumers with upselling, are often obnoxious and annoying:

  • Wanting to register a domain, but having to click your way through three pages of overprized hosting, email forwarding upsells, website backup plans and ridiculous certificates.
  • Calling your mobile phone provider to ask one simple question, and having to withstand a barrage of “special promotion offers” and “suggestions how you could get more value out of being a customer of Bigcorpmobile”, instead of a straightforward answer.
  • Going into a Chinese restaurant for some fried rice and dimsum, but being having to battle psychic kung fu from the waiter who wants you to feast on $80 abalone.

I want you to set aside any moral judgments for a moment - you’ll see in a minute why upselling, when done right, is not just not nefarious, but indeed the right thing to do for both you AND your customers.

Does your product or service provide real value? Is your offering making your customers more successful? Does it help them achieve their desired outcome? For every $1 they invest in you, do they get $1+x in value in return?

If the answer is yes, then you should look for opportunities to support them even further in their quest for success. 

Upselling to a customer is easy

If they’ve already bought something from you, you’ve already gained their trust.

If you’d invest even half as much effort into upselling your current customers as you invest into new sales leads, you’d probably make a lot more money with a lot less effort. 

But why isn’t upselling common practice then? Why aren’t you focusing more of your sales efforts on upselling to your customers?

Upsellophobia

That’s not a real word, but if there’s Sesquipedalophobia (being afraid of long words…), Upsellophobia should be a real condition.

There are basically two thing sales people fear when it comes to selling to their current customers:

1) Not wanting to harm customer relations 

If you’re under the misconception that selling is selfish or annoying, then you obviously don’t want to do it to your existing customers. You want don’t want to risk upsetting people who are paying you money.

If that's what's holding you back... just get over yourself.

2) Worried about unhappy customers

If you’re harboring suspicions that your current customers aren’t satisfied with your product, reaching out to them can seem risky. Maybe they’re currently not really satisfied, but as long as you don’t rattle the cage, they’ll keep paying you money. If you re-approach them to sell them more… it might just be the straw that breaks the camels’ back and prompts them to cancel.

If that’s your line of thinking, consider this: by giving them the chance to voice their discontent, you get a clearer understanding of the problem, and are better equipped to solve it. It’s an opportunity to improve your product, your service, your sales process, your training or onboarding.

If you’re the kind of company that doesn’t just avoid problems, but proactively seeks to solve them, it can strengthen the relationships you have with your customers and turn them into evangelists for your brand.

How to upsell

Here five simple upselling ideas you can put to use right away.

Qualify for upsells from the beginning

Even when they’re still just an opportunity in your sales pipeline, already start qualifying them for future upsells. 

Ask them:

  • How are you intending to grow the business?
  • How are you intending to grow the usage of our service?
  • What's kind of your vision for the next twelve months?
  • If everything went right, would you use the service or our product at the current capacity, or would it grow? And to what degree?

By doing this, you create a goal to work towards as partners with mutual interests.

Announce the upsell

When you’re closing the initial deal, already let them know you’ll upsell them in the future.

Ask them:

  • If we deliver on all our promises, I will come back to sell you more, so that we get more revenue from you, and you get more value from us.
  • If we deliver all this value to you, is it fair that I approach you in 3 / 6 / 9 months once you’ve accomplished x, y and z to take our relationship to the next level?

It’s a simple thing to set the tone for the relationship they’re engaging in and primes them for what’s ahead.

Determine future opportunity value

Try to figure out what the value of this opportunity could be in the future. You want to focus on opportunities that will grow with you over the next 12 months and more, and prioritize your sales efforts on opportunities with strong expansion potential.

With our sales CRM for example, we love it when fast-growing sales teams sign up for our service, because they’ll buy more seats as they expand.

Quarterly check-inns

Reach out to your customers at least every quarter and have a real conversation to gauge how satisfied they are, how effective they’re using your product and try to identify ways how you can deliver more value.

Don’t just do this when you’ve got a promotion going on or when you need to make quota - do this more with the mindset of a partnership. Sometimes this can even mean things like introducing them to a potential customer, sharing valuable insights with them, or helping to make them successful in any way you can think of. 

Every interaction with your customer should be an extension of the value they get from your product or service.

The ultimate upselling tip: JFDI

I often get asked about examples of upselling techniques, how to upsell over the phone and best practices.

The best advice I can share is: stop overthinking and start doing.

Here’s a simple 3-step-plan for you right now:

  1. Take a piece of paper and a pen, or open a text editor.
  2. Write down 10 names of current customers you think are happy.
  3. Send them an email or call them today and ask them if there are ways how you could serve them better. Ask them to get on a quick 15 minute call and have a conversation about this.

It really boils down to this: upselling today in a makeshift way is a lot better than upselling next year with a sophisticated, clever plan.

Once you've had a few of these conversations with existing customers, watch the upselling web live chat I recently did with Lincoln Murphy from Gainsight or send me an email with any further questions you have.