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The SES Approach to Success

Create a culture of upsells

8/14/2018

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Best in class B2B companies have 130% Net Revenue Retention (NRR) i.e. they grow their accounts, on a net-basis, 130% each year. Obviously, Gross Revenue Retention plays a part. But upsells or expansions are the driving force behind NRR. So how to do you create a culture of upsells?
There are 3 ways that you can easily create a culture of upsells
  1. Focus on the customers goals
  2. Ensure clear ownership of upsells
  3. Have the right compensation structure in place

Help the customer achieve their goals, not yours

The easiest way to generate upsell opportunities is to stay focused on your customer’s goals, not yours. If your team is focused on quota attainment, they will inevitably break the relationship of trust, or even worse, sell the customer something they don’t want or need. But if the team continues to help the customer achieve their goals, they will inevitably uncover opportunities to sell more.
Example: Acme Inc purchased a SaaS platform from Startup Co to help streamline it’s internal process. After 6 months, usage was mediocre. Instead of the CS Rep trying to sell additional products, they focused on increasing adoption and usage. Through those efforts, the CS Rep discovered that there were additional users that needed to be on the platform, as well as a whole other team that needed to be using the platform. By staying focused on the customer goals, the Rep was able to uncover upsell opportunities without even really trying.
Ensure upsell ownership is well understood by everyone
Make sure that it is very clear who owns the responsibility for the upsell. Is it the sales team? The CS team? The AM team? Or perhaps a dedicated upsell team? Based upon my work with different companies, there is no ‘correct’ answer because it depends upon the nature of the product, the relationship with the customers and the skills of the members of the various teams. The key is making sure that everyone understands who ultimately owns upsells.  
Have the right compensation structure in place
Whichever team has responsibility for the upsell, ensure that the right compensation structure is in place. Generally, the most successful compensation systems will have two components:

1. A quota - without it, upsells become a "nice-to-get" rather than it being a critical, and core, part of the individuals responsibility. 

2. Rewards for those who do well - when an individual achieves/exceeds their upsell quota, reward them generously through commission percentage, accelerators, uncapped upside or other mechanisms. The impact of upsell revenue is massive to a company's P&L so reward your best upsellers​
Implementing these simple changes, it is possible to create a culture of upsells and really drive NRR.

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    Author

    Azim Nagree is an ex-Bain consultant with 20+ years in leading strategy, growth and operations transformations. 
    ​

    Mr Nagree has worked with all company types ranging from large Fortune 50 companies down to Series A start-up ventures. He holds a Masters of Business Administration (1st Class Honors) from the Wharton School of Business. 
    ​
    Mr Nagree's full experience can be found on LinkedIn.

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