We’re pleased to announce the Bowery Capital 2020 Startup Sales Stack Report! This report is meant to serve as a guiding framework for anyone evaluating sales solutions. Whether sales, marketing, customer success or management, if you’re thinking of using or buying software to optimize customer…
Most SaaS startups seek revenue growth along three axes: new customers, more spend within each account, and new business lines. In other words, traditional growth, upselling and cross-selling. Traditional growth through the addition of new customers may be difficult to execute in practice, but at least in theory it’s straightforward: find the companies the most benefit from your product and who are willing to spend on it, then repeat. Upselling is even more straightforward, requiring customers with additional willingness to spend, though identifying when and how they’re ready is a separate art in itself. SaaS cross-selling, however, is different than the first two axes. It requires you to change the nature of the dialog with the customer you’ve maintained since day one: buy our core offering and it will solve your problems. Hopefully, of course, your new offerings (perhaps even just modules or expansions of the core) pair nicely with the existing customer base, and fit needs that they would encounter as they grow naturally. Sometimes, though, new SaaS cross-selling efforts put a strain on an account relationship.
About two months ago, Kevin Karner, Head of Customer Growth at Drift, joined us on an episode of the Bowery Capital Startup Sales Podcast to discuss “SaaS Upsell & Add-On Sales Strategy.” Our discussion inspired this post and the three steps below. Prior to joining Drift as one of its first sales hires, Kevin scaled the add-on sales team at Hubspot from scratch to 15 team members. While not every SaaS company will need a separate group for cross-sales in-house, Kevin’s focus on that one axis of selling led him to some insights that resonated with me; I’ll do my best to surface and expand on them here.
1) Any Core Customer Is A Potential Add-On Customer
Don’t be afraid to approach unhappy customers. You cannot know what needs are at every company at every moment. You cross-selling a new module may save an account from churning if that was a pressing, previously unfulfilled need. Remember, moreover: these prospects already like you. As Kevin frames it, the best attitude for SaaS add-on salespeople is “they need it, we have it.” Existing customers may have needs their current buy-in doesn’t address, and you have the add-on solutions they need. Asking for money right as a customer is about to leave may sound like the last thing your sales team wants to do, but when the level of service a customer bought into doesn’t do what the customer needs it to do, cross-selling becomes a unique opportunity to address pain points, add much-needed value, and potentially mitigate churn. Let them determine if the price is right.
2) Consultative Attitudes & Levels Of Patience
Recognize why SaaS cross-selling differs from traditional sales strategy. Successful add-on sales requires a sensitivity that goes beyond the traditional ABC (“always be closing”) frame of mind. “You’re not losing money if you don’t upsell, but you lose money if you push too hard and lose the customer,” Kevin explains. “The pitch instead becomes: “We’re here to help you get more value out of our product.” Here, often, cooperation between sales and account managers becomes paramount. In an example Kevin shared in our episode, Hubspot’s add-on sales team took control of the entire cross-sale process, from the initial reach-out to bringing in sales engineers for technical sales and finally handing the customer back to the account manager to close. This approach, Kevin explains, preserves the integrity of the customer-account executive relationship, considering that the role of the AM should be to look after the customer’s onboarding and success. Remember, “they need it, we have it.” If you mean this, and the customer is to believe you, that means you should position yourself as a consultative seller who can understand where needs might be and hopefully meet them with add-on products (though tangentially, intelligence on gaps valuable to product as well). Cross-sellers are commissioned too, but in order to play the role, patience is key, so ensure you have sufficient leads to meet your targets.
3) Timing Is Even More Critical & Should Be More Apparent
Catch the right customers at the right time with the right tools. Speaking to the size of HubSpot’s 18k+ customer base, Kevin quickly learned that an efficient add-on sales strategy needed to focus on the right customers from the get-go. “It’s important not to waste time with people who just want to chat,” Kevin explains. At Hubspot and Drift, Kevin has made use of a host of different tools to empower his team’s approach. Successful sales teams track customer’s interaction with public content, pull from website and CRM analytics, and inform their lead scoring by looking at customer interactions from all over social media, content, and conversations with their account managers. Powerful tools such as BuiltWith and Datanyze offer insights into a customer’s existing technology stack, and coupled with an account manager’s observation that a customer is looking for a website revamp in the near future, enable a sales team to make smart decisions. Docalytics and TrackMaven (a Bowery portfolio company) respectively offer detailed metrics on interactions with content and powerful enterprise analytics. Customer Success Management platforms like Totango and Gainsight can also help to manage all this information into digestible scores and workflows. Spend time to find the right tools for information gathering and gauging customer readiness for cross-sell. After all, the goal is to match customers with the best add-ons that will work for them, and as they’re already customers, you have the access. Here’s a graphic depicting the cross-selling process and key tools that will help you grease the wheels.
If you missed the podcast that inspired this post, make sure to check out the full episode, “SaaS Upsell & Sales Strategy” with guest Kevin Karner (Head of Customer Growth at Drift) now. Also, check out past episodes here and make sure to subscribe to our podcast to get new content every Friday.
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