Hey, 👋 Scott from The Sales Mastermind here. Today’s edition only takes 3 minutes. ​ Financial returns are inversely correlated with the sexiness of the opportunity. When something is attractive, sexy, exciting, and popular, the amount of money to each individual decreases. The same is true in business. Selling to new customers always feels more exciting. And many founders forget their current customers. Today, we'll cover:
​ 13% Annual Growth A SaaS company I worked with charged for one primary value metric, the number of users, internally called "Seats." Customers were supposed to pay more if they added more than their allocated Seats. But it wasn't automated. Anytime a customer added extra Seats, the team contacted the customer, got approval to increase billing, and manually changed their next bill. At least they were supposed to. As you can imagine, this was rarely done. Many customers were well above their limits. During a management meeting, the CTO discussed how much he hated spending time updating billing. So we decided to automate Seat upgrades. When someone tried to add another Seat they could either remove an existing user or pay extra. No one expected much revenue, but it would remove the manual headache for the team. Fast forward two months and we'd seen 13% revenue growth from just upsells. The moral is to stop sleeping on upsells. ​ New revenue is Simpler Many founders focus on new customers because it's easy to track. It's certainly true the tracking is easier. But it's the most expensive revenue you can work on. It requires expensive teams to slowly build trust with buyers who don't know you and need a strong reason to change the status quo. And you lose far more new deals than you win. According to Invesp CEO Khalid Saleh: "The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%." A good rule of thumb is to fix your reporting, ideally using cohort analysis as a percentage of initial spend. Then, dedicate up to 30% of your sales time to working with existing customers to find upselling opportunities. ​ Steps you can take: Upsells are quick revenue. The caveat: Upsells are only so scalable, as many customers don't need or want more from you. I'd rarely recommend focusing more than 30% on Upsells. Upsell List Usually suitable for an extra 10-20% in revenue
Upselling is simple but not easy. Long-term upselling is a specialised skill, and you'll have dedicated sales reps. In the short term, don't underestimate the potential of working out what more you can sell to your customers. ​ BONUS: Reselling Expect to resell 5-10% of previous customers over two sales cycles.
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