SaaS product marketing: Upsell upgrade are one of the most important aspects to SaaS marketing. With freemium versions, bargain basement prices for subscriptions, free trials, etc., it’s hard not to emphasize their importance in this industry. The thing is that if you can get a customer at $100mo then quickly upgrade them into someone who pays $1k per month or more–they may spend 10 years with your company instead of just 1 year which means they’ll likely have higher lifetime value than other customers too so maybe you could turn an average valued startup worth about 50 million dollars into something much bigger like 500 million!
Upsell Upgrade in SaaS
I personally define upsell as the act of persuading a customer to buy an additional product or service, while I call upgrade more aggressive and includes modifyingchanging their current solution.
- Upgrade : Higher revenue from increased usage of current SaaS product capabilities.
- Upsell : Higher revenue from new SaaS product capabilities.
The difference between an upsell upgrade is that the latter will depend on finding new solutions to unknown problems. This is not to say they are completely independent, because the need for increased usage can be highly correlated with a need for new capabilities as growth in customer size often entails greater volume of business along with more complexity.
Now that we’ve got the basics out of the way, here are 8 tips to help you maximize your SaaS business by getting more upsell upgrade.
Tip #1 | Measure Value, Not Use
When SaaS product marketers think of upsell upgrade, they must always keep in mind that it is not just about pricing. Pricing is important but should be aligned with customer value instead of profit margins. You can use features or usage to price bundles because those are the measures most closely correlated to what customers will pay for.
Tip #2 | Bundle Purchase Scenarios, Not Features
A customer’s value of your product is not always easy to measure, as it varies from person to person. Some customers may find charts and other features valuable while others might just want a service that works well. This means you have the responsibility of drawing out pricing plans with all these different use cases in mind.
One way to maximize profit is by segmenting the market into different customer groups and then further segmenting each group over time. For example, you should bundle purchase scenarios instead of features for maximum profitability.
SaaS Product Marketing Tip #3 | Open The Front Door Wide
Making it easy for customers to adopt your product is important because without them, you cannot upsell or upgrade. It’s best to start with an entry level offer that meets the needs of all customer types and make sure they are satisfied at this level before moving on.
SaaS Product Marketing Tip #4 | Grow With Your Customers
If your customer only has ten salespeople, you will have a hard time upgrading your SaaS product to twenty users. If they are just getting started with their new website using our content management software, then advanced BI of usage statistics might be tough sell for them right now. However as the business grows and begins understanding more about how we work together I am sure that there is going to come a point where my company needs something different from what it currently offers me. When this happens all we need do is map out the growth path and align prices accordingly.
SaaS Product Marketing Tip #5 | Design For Discovery
Aligning value with need is a two way street. Your customer must have the need, but it also needs to see and understand how your product can provide them what they want. When designing an SaaS (Software as a Service) product, you should give customers just-in-time access to new features that match their changing demands so they don’t get overwhelmed by all of the options or find themselves paying for things that are unnecessary.
SaaS Product Marketing Tip #6 | Track Penetration Against Potential
In order to drive customer upsell upgrade, you need a more personalized approach. This is especially true if your customers are segmented based on their potential for growth with the product. By tying these standards back to actual data, we can better predict what type of person our salespeople should be targeting in terms of reaching out and interacting with them.
SaaS Product Marketing Tip #7 | Enable Self-Service
SaaS entrepreneurs need to consider how they can give customers the opportunity to buy even if their business is closed. For example, when a customer has an urgent problem and your product offers what he needs then you want him to be ableallowedgiven the chance of buying it with no hassle.
SaaS Product Marketing Tip #8 | Don’t Farm When You Should Hunt
Just because your customers can upsell upgrade themselves doesn’t mean that you should just give up on trying to sell them new things. The key is figuring out whether or not there’s a significant value gap between potential and penetration by looking at the customer constraints, such as how many events they have per year. For example, if you’re selling an event management system with 5 max capacity but your client only has 3 events annually then it would be more beneficial for them to buy the social media add-on module than increase their usage from 510 total maximum capacity of 10. And this isn’t just about acquiring new clients – existing SaaS customers might benefit from upgrades too! As long as upgrading those items won’t cause high churn rates in service packages (e.g., no need for any support after purchasing), sales reps deserve compensation.
