Entrepreneurs and sales experts have long known that selling to your existing customer base is good business. It’s 5 to 10 times cheaper to upsell a current customer than acquire a new one, and the average spend of a repeat customer is 67 times higher. The world’s most-successful SaaS providers take three approaches to increasing revenue: acquiring new customers, upselling, and reducing churn. For many subscription business owners, improving your revenue, and increase customer lifetime value requires designing and implementing a program for upselling.
Upselling in Practice
One of the world’s most-successful subscription businesses, Salesforce, has built an empire that’s worth $2.27 billion annually through a strong focus on upselling. They don’t bombard their customer base with frequent phone calls, or offer freemium subscriptions, but simply let customers come to the realization on their own that they need more service than they’re currently paying for.
As Joel Yorke puts it, “if you’ve ever been a Salesforce customer, you know 90% of the upgrade process…[is] repeatedly bumping into the limits of your current subscription.”