Customers are some of your best leads. According to a 2022 HubSpot Blog survey of more than 500 sales professionals, more than 70 percent said that upsell and cross-sell drives up to 30 percent of their revenue.
Plus, retention is a lot easier than getting new customers. You can draw a helpful parallel with recruitment here. Think of the time, funds and effort to pay for recruitment software, post job ads, sift through CVs, interview candidates, negotiate the employment package, then train and onboard a new employee…
Vs.
Simply keeping your existing employees happy so they don’t quit on you.
The same goes for customers. New deals are not always the best deals.
‘Upsell’ encourages the purchase of a more premium version or tier of your products or services, while ‘cross-sell’ refers to additional products or services to complement the existing engagement.
Existing customers have a proven track record of buying from you. The reciprocity principle is already at play — you’ve given them products or services, they’ve given cash in return, and that connection has been established. They’ve spent resources and time on their deal with you. There’s psychological buy-in.
It’s a settled matter; they can move on to think of other concerns. They feel empowered by their judgement: the investment has worked out, and they’re seeing a return. The immediate future of their organisation is built with your business’s support. They’re happy.
Hopefully.
That said, ‘The day you sign a client is the day you start losing them,’ as Don Draper’s character in Mad Men famously stated.
The challenge you face is to turn a happy honeymoon into a lifelong relationship, survive moments of turbulence, and build a long-lasting connection. Things do change over the course of a customer relationship. To avoid stagnation, you need to keep proving value so you don’t get taken for granted. One of the ways you can retain value is by recommending more services that will genuinely relieve your customer’s issues. To do that, you need a deeper understanding of an organisation’s machinations and problems, which is only acquired through trust.
Whatever the catalyst, continuing the marketing and sales process with your existing customer database is a win-win. It’s not about bleeding them dry. It’s about deepening the relationship and establishing a cadence where customers are delighted to keep coming back for more, like hungry diners at an all-you-can-eat buffet.
This makes you the exception to the norm. You stand out in the eyes of the customer because you’re constantly and proactively bringing value beyond your initial engagement. Very few businesses do this well. There is ample space for you to differentiate yourself by elevating your retention game.
One step you can take today is to identify everything you can potentially offer a customer, and compare that to what they are currently buying. Then, work out a plan to get from where you are now to that full-service goal.
Simply make a grid with columns for each of your products or services, at each tier. For your existing customers, mark where they are on that grid and how much they’re spending. In collaboration with the customer service team, try to identify what else would interest them. This is called a ‘white space’ analysis. You’re looking for the gaps, either in what they buy, or perhaps what you should be selling.
From here, you can set sales value targets. That is, the maximum potential sale value of a customer based on your knowledge of their current budgets, problems and goals, as they align with your offering. You want to move the dial from the current engagement closer to that target.
Then, it’s all about inter-departmental alignment. Identify how each department should contribute, and who is accountable for driving the process overall.
For example, marketing teams can tailor lead nurturing messaging towards those topic areas, sending emails with relevant content (assuming your customers are signed up for marketing contact, which they should be!). Company newsletters are a good way to inform customers about your other services.
While marketing’s at work, sales can strike up a conversation, too. Frame it as a regular post-sale health check. Do one every quarter or so.
Customer services can feed back any nuggets of wisdom they come across, so that all of this targeted messaging is hitting the right notes and is timed perfectly.
And if it doesn’t work? Hey, break-ups happen. It’s not the end of the world. Make the closing of the relationship the best part of the whole experience (it won’t be, but the trying counts). Pain-free, calm, orderly.
A big part of elevating your retention game is also playing the long game. No provider is perfect. Hindsight and a few bad experiences outside your partnership can certainly turn the tide back in your favour, even if things didn’t end on the best terms. Be the one that got away. Nurture those ‘previous customer’ leads, keep in touch, be a valuable member of their network. Former customers do come back, it’s been known to happen (we’ve seen it happen recently ourselves!).
And even if they never return, they can refer you to others.
The old sales mantra is ‘always be closing’ but the customer upsell mantra is ‘always be building the relationship’.
Maintain that connection and when your previously ‘small fish’ client comes back five years later with ten times the budget and a nostalgic recollection of just how great you are, you’ll be glad you did.