Finding new customers is a great way to build your business, but that’s not all there is to it. Paying equal—if not more—attention to your existing client base can make a huge difference for your growth as well. Below are some ideas on how to maximize the value of your accounts through upselling in a way that builds trust with your customers and helps increase your RMR.
Retaining Customers vs. New Customers
It is a proven fact that that bringing on new customers actually costs much more than simply retaining and upselling the ones you have (mind blown emoji). In fact, according to Gartner, 80% of your company’s revenue will come from only 20% of your existing customer base. This conveys the point that taking care of and upselling to your existing customers has significant benefits compared to just searching and signing new customers alone. We cover this topic, as well as calculating and managing attrition in detail in our Minimizing Attrition article.
Why Upsell
It’s easy to think of upselling as selling the most expensive product or service options to your customer because it’s good for business. In reality, that couldn’t be further from the truth. Upselling helps both the customer and the business, especially when it comes from a place where the customer experience, and their wants, needs, and goals are taken into consideration.
A customer may be content with the current product they have, but finding out how to make the device even more efficient for their life is where upselling comes in. Is there a way to make your service or product easier to interact with? Sometimes subscribers may not be fully aware of what their product is capable of, and upselling is a great way to show them.
Tips for Upselling to Your Customers
Upselling additional products and services in a way that will strengthen the relationship between your business and your customers requires thoughtfulness, time, and effort. Below you’ll find some ways to implement upselling techniques to your business that are mutually beneficial.
Know Your Customer
To sell anything to your customer, first you need to understand their goals with the product or service. This principle is really step one in any selling process. Think about walking into a shoe store looking for running shoes. If a salesperson, unprompted, started trying to convince you to buy business shoes, then walking shoes, without ever inquiring about why you arrived to the store in the first place, you’d probably walk out as fast as you walked in. But if the sales rep asks, “what are you looking for today?” and you tell them running shoes, this automatically drastically narrows down what products will work for you, and allows the sales rep to better service you.
The sales rep could then ask you “how much do you run? Do you run on trails or on a treadmill? Do you have high arches or are you flat footed? Etc. By asking these detailed questions, the sales rep is learning about your goals and what you plan to accomplish with your shoes.
Even though that interaction generally happens in a store as you walk in, consider thinking about scheduling a time to talk to your potential or existing customers about their goals. This time will not only allow you to learn about their ultimate needs and goals with your product and service, and what additional features and services can help them with their goals; it will build a foundation of trust with your customers.
Identify Customers that Have Needs
Not every customer needs to be sold an additional product or service. There’s an old saying that goes, “content makes poor men rich; discontent makes rich men poor.” If you continually bother a content customer with unnecessarily prompts to buy more stuff, it will ultimately lead to customer churn.
Identifying where customers have needs may be from scheduled meetings, or maybe some investigation of your own into your customer’s profile and accounts. For example, you may notice a customer that uses security systems in three different stores and is using three different single accounts to manage everything online. Knowing that if they were to upgrade to a “business” or “enterprise” account, it would allow the customer the ability to manage all properties in one place online, you could reach out to that customer armed with a solution to a problem or inconvenience they might not have recognized.
Think of upselling this way: If you can’t think of how an additional product or service would help your customer’s goals, or you can’t show the customer how it will help them accomplish their goals, then there’s no reason to pitch it.
Proof is in the Pudding
Just as you want to be prepared with a solution to a gap in your customer’s product or service, you’ll also want proof to back up your claim when you are upselling. This also means you’ll want to track your customer’s performance metrics after the upsell. For example, AG lets our dealers know that AG Chat reduces false alarms by 38%. Even though AG Chat is free to our dealers (not really an upsell), we’ve tracked the performance of dealers who have signed on and how it affected their accounts, so we can share proof that it works with dealers who aren’t signed up. This kind of social proof essentially works as a testimonial for your additional products and services, and testimonials can increase conversion of sales by 34%.
Overdoing it and the 25 Percent Rule
Using the same shoe selling scenario (say that five times fast) from earlier, if you told the sales rep that your price budget was $100, and the person tried to sell you a $200 shoe (that’s 100% more than you were willing to spend!), chances are you’d walk out without making a purchase at all. That’s overdoing it.
Now, if the salesperson where to show you a shoe that meets all of your previous wants and needs, but it happened to be $120, only 20% more than you originally were willing to spend, you’d be more inclined to be more flexible with your budget, because the shoe is everything you want and need. If you stay within 25% percent of your customer’s original pay plan or purchasing budget, you’ll have better success with your upselling.
If you’re looking to grow your RMR, upselling to your current clients is a great way to do so. Make sure your sales team and customers have a clear path of communication and schedule a time when you or your team can review your customer’s goals. Upselling can be as easy as listening to your customers.
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