Dan Martell - How to Upsell to Increase Customer Retention

00:00:00.000 Hey there.

00:00:00.500 I'm Dan Martell, serial entrepreneur, investor,

00:00:02.220 and creator of SaaS Academy.

00:00:03.640 In this episode, I want to share with you

00:00:05.400 how to use upselling to increase customer

00:00:07.620 happiness and retention.

00:00:09.420 Because to me, if you're able to get people

00:00:12.260 a higher level of service within your product,

00:00:14.520 then you're going to get them happier.

00:00:15.840 They're going to be more activated.

00:00:17.000 And stick around.

00:00:17.880 And be sure to stay to the end.

00:00:19.720 We're going to share with you how to get my EBR flow planner.

00:00:23.240 It's a nine box model for doing executive business reviews.

00:00:27.480 Some people call them QBRs, quarterly business reviews.

00:00:29.680 but sometimes we don't do them every quarter.

00:00:31.180 So the EBR Flow Planner, I'll tell you

00:00:33.400 how to get a copy of that at the end.

00:00:48.020 So when I was building my company, Flowtown,

00:00:49.960 I remember one of our potential investors

00:00:51.920 talking to us about a concept called expansion revenue.

00:00:54.380 And I was like, oh, OK, never heard about this.

00:00:56.380 What's expansion revenue?

00:00:57.920 Essentially, it's the amount of money

00:00:59.960 that you add to overcome contraction and downgrades

00:01:04.080 of your account.

00:01:04.920 So if you have customers that pay you every month

00:01:09.260 and they cancel, well, if you can

00:01:10.560 get a certain percentage of those customers

00:01:12.260 to upgrade to another plan or to add new add-ons

00:01:15.020 to expand their relationship, their monetization

00:01:18.680 with your product, that's called expansion revenue.

00:01:21.080 And there's this really cool thing

00:01:22.380 you want to achieve at some point called net negative churn.

00:01:24.660 I won't get into that.

00:01:25.820 But understanding the concept and then trying to think

00:01:29.080 to myself, how can I introduce add-ons, et cetera,

00:01:32.420 what I call strategic pricing or strategic P3, pricing,

00:01:35.620 packaging, and plans, will allow you to figure out

00:01:38.760 how to do upselling properly.

00:01:40.700 But in this video, I want to share

00:01:42.060 with you what one of my coaching clients, Ryan,

00:01:44.960 asked me about that I taught him, which

00:01:46.980 was how to leverage support to get more people to be aware

00:01:51.260 and buy add-ons of your product.

00:01:53.480 There's actually a few other steps

00:01:54.860 I'm going to get into first, but it

00:01:57.140 is a big opportunity that helped Ryan increase

00:01:59.480 his expansion revenue by 10% on an annual basis.

00:02:02.860 That's huge.

00:02:03.980 If you know anything about expansion revenue,

00:02:06.440 and I want to teach you how to do that today.

00:02:08.680 Number one, offer an account review.

00:02:10.820 Now, I think my favorite example recently of this was Zoom.

00:02:15.380 So I don't know if you guys use Zoom.

00:02:16.700 I use it for all my team meetings, all my webinars,

00:02:19.580 all of my live streams.

00:02:21.260 I mean, it's an incredible platform.

00:02:23.280 And I think it was around Christmas

00:02:25.780 where I got an email from Zoom's, one of their whatever.

00:02:29.740 I don't even know if it was an account executive

00:02:31.560 or it was an SDR or BDR or whatever, or a customer

00:02:34.380 success rep.

00:02:34.880 It didn't matter.

00:02:35.800 But they were like, hey, we just want to follow up,

00:02:37.840 do account review with you, cost nothing,

00:02:40.120 and see where you guys are at, if you need anything from us,

00:02:43.460 and then also talk about some new things that

00:02:45.520 are coming up in the new year.

00:02:47.200 And I thought that email was incredible.

00:02:48.700 Now, I didn't take them up on the offer,

00:02:50.220 but I sent it to my team.

00:02:51.260 And I had one of my team members who

00:02:52.620 runs kind of operations, get on the call

00:02:54.320 and have that account review.

00:02:55.900 And it's just an incredible way of saying, hey,

00:02:59.660 I want to make sure that you're getting the most out

00:03:01.500 of the product.

00:03:02.320 I want to see if you have any questions for me.

00:03:04.080 So it's proactive.

00:03:05.220 Most people don't think about this proactively

00:03:07.720 into their business.

00:03:08.640 And then we're also going to tell you

00:03:09.980 about kind of our roadmap and what we've got going on.

00:03:12.000 Well, that conversation is where you have the opportunity

00:03:15.340 to offer any upsells, any add-ons, any new.

00:03:19.680 You could even pre-sell future releases of your product

00:03:22.560 or modules in that conversation to start pre-selling

00:03:26.160 and building commitment amongst your customer base.

00:03:28.440 So I think one of the most powerful things

00:03:30.540 that you could do today if you have customers

00:03:32.760 is offer an account review and use that conversation

00:03:35.980 to drive an upsell.

00:03:37.240 Number two, QBRs, quarterly business reviews.

00:03:40.620 Now, I don't call them that.

00:03:41.740 I call them EBRs because, again, they don't always

00:03:44.020 happen on a quarterly basis.

00:03:45.880 But the idea is that when you onboard somebody,

00:03:49.140 you want to set up essentially a flow for checking in with them.

00:03:52.220 And you set that expectation at the beginning.

00:03:54.620 Now, obviously, this requires a customer investing

00:03:57.560 at a level, usually a mid-market investment, 10k annual contract

00:04:00.960 value, or higher, where you can afford to have somebody

00:04:03.900 dedicated to the account, and maybe twice a year,

00:04:06.600 three times a year, or quarterly.

00:04:08.540 You have a scheduled meeting where

00:04:10.080 you review their goals, their projects, any challenges.

00:04:15.240 You make sure that you help loop in some other people

00:04:17.280 on your team to help overcome those challenges,

00:04:19.020 because you're really just looking for them

00:04:20.280 to adopt the technology more.

00:04:22.140 Implement further into their organization

00:04:25.040 and activate any accounts that may be dormant

00:04:27.560 or any departments that aren't using it as much.

00:04:30.120 You want to show them the data of how their product,

00:04:32.280 your product's being used within their organization.

00:04:35.240 And it's in that conversation, similar to an account review,

00:04:38.820 but on a more strategic cadence that they commit to upfront

00:04:41.580 so that they're always showing up with the right team members,

00:04:44.040 that you have the opportunity to upsell or identify

00:04:47.220 expansion revenue opportunities.

00:04:49.440 Now, who decides to sell?

00:04:51.040 Is that customer success or an account exec?

00:04:53.580 That's a different debate for another day.

00:04:55.580 But at least identifying those opportunities

00:04:58.500 are going to come from your QBRs, your quarterly business

00:05:01.740 reviews, or again, what I call EBRs.

00:05:03.800 That is the flow, is just helping them.

00:05:06.660 Kind of think about like project management.

00:05:08.120 If you were helping them manage the deployment

00:05:10.120 of your technology in their organization,

00:05:12.760 you'll probably identify gaps.

00:05:14.800 And it's in those gaps that if you have an add-on,

00:05:17.200 You have an upgrade plan.

00:05:18.500 You have a solution that you can offer them.

00:05:21.880 That'll allow you the opportunity to make the offer.

00:05:25.500 Number three, support selling.

00:05:27.640 Now, this is the specific strategy

00:05:29.720 that I taught my coaching client, Ryan, which is,

00:05:32.500 every day I was like, how many support people do you have?

00:05:34.600 He was like, well, I think we got like 20.

00:05:36.260 It's like, perfect.

00:05:37.380 Those people every day are communicating

00:05:39.640 with customers, hundreds of customers a day.

00:05:42.320 And if you build the dashboard properly,

00:05:45.800 So essentially, most support software,

00:05:47.420 you can add tags to an account to give the person context

00:05:51.800 for what plan they have, what level of revenue they're at,

00:05:54.120 what level of support they might have, any other modules

00:05:56.480 that they're using.

00:05:57.440 And what you can do is you could run a query to say, OK,

00:05:59.740 everybody that's not using this, I

00:06:01.100 want to add a flag to the account in your support software.

00:06:04.340 And as support teams, you've got to teach them this.

00:06:06.500 There's some training, some coaching involved.

00:06:08.380 They solve the problem for the customer.

00:06:10.560 They might see that they don't use a certain area

00:06:13.160 of your product, and they can offer that to them.

00:06:15.800 So after they solve their problem,

00:06:17.480 imagine you reach out to a support person

00:06:19.520 and they start your problem and then say, hey,

00:06:21.200 I noticed in your account this.

00:06:23.160 Did you want to learn about how you can get this benefit

00:06:26.220 in our solution?

00:06:26.960 And be like, oh, wow, that's amazing, thanks, let me know.

00:06:29.620 The best company, the best example that does this is GoDaddy.

00:06:33.300 I can't tell you, probably once a year,

00:06:36.320 somebody from GoDaddy calls and it's like, hey,

00:06:38.220 it's John from GoDaddy, I was just in your account,

00:06:40.600 I noticed that this thing was expiring,

00:06:42.660 and I wanted to know if you're still using it.

00:06:45.300 And I'm like, wow, here's somebody

00:06:47.280 that reached out to me proactively

00:06:49.740 to ask me if I'm still using something,

00:06:52.020 because if it's going to renew and I'm not going to use it,

00:06:55.260 that they'll cancel it for me.

00:06:57.200 But this was the kicker.

00:06:58.500 In that conversation proactively, they then said,

00:07:01.040 hey, I noticed that you have 27 domains,

00:07:04.980 and if you had this subscription package,

00:07:08.060 you could actually save 10% of those domains.

00:07:10.160 Do you expect to renew those domains next year?

00:07:12.300 If yes, you should probably be on this other thing.

00:07:15.280 And I was like, man, here's a guy that

00:07:17.340 was proactively helping me save money.

00:07:18.840 Now he's trying to get me committed

00:07:20.540 to a long-term subscription product, which is probably

00:07:22.580 better for their internal revenue.

00:07:24.100 And it was done in a proactive way

00:07:26.440 from a support point of view.

00:07:27.660 So here's the opportunity for you.

00:07:31.360 If you have enough customers, are there

00:07:33.140 situations in your customer base where things are true,

00:07:36.040 that if this is true and this is true,

00:07:37.680 this is what they need to be on.

00:07:39.300 It's better for them.

00:07:40.000 It's better for us.

00:07:41.580 If that's true, then you want to build

00:07:43.820 that list of targeted accounts, give it to somebody on support,

00:07:46.920 have them proactively reach out, phone calls, emails,

00:07:51.520 help them out, and then offer that upgrade or that enhancement.

00:07:55.620 And I think that is a win-win-win, where everybody wins,

00:07:58.540 a customer wins, you win, and your team wins

00:08:01.020 because they're building momentum.

00:08:03.140 So real quick recap, how to use upselling

00:08:05.220 to increase customer happiness and retention.

00:08:07.120 Number one, offer an account review.

00:08:09.760 Number two, set up and schedule QBRs

00:08:12.720 so you can manage them quarterly business reviews.

00:08:15.140 And number three, support selling

00:08:17.380 by not only solving their problems,

00:08:18.840 but looking for opportunities to enhance their experience

00:08:21.220 with your product.

00:08:22.280 As I mentioned at the beginning of this episode,

00:08:24.200 I want to share with you an exclusive resource called

00:08:26.260 my EBR Flow Planner.

00:08:27.660 Essentially, it's a nine box model,

00:08:29.920 the agenda that you would follow to execute

00:08:33.100 your quarterly business reviews.

00:08:34.680 The link's below to download that.

00:08:36.340 But the way it works is really simple.

00:08:37.940 It's got all the flows that you're

00:08:39.700 going to use to initiate the quarterly business

00:08:42.440 reviews or the EBRs.

00:08:43.780 And then that way, you can use that exact same agenda,

00:08:45.740 that worksheet, to follow up.

00:08:47.760 It kind of works into itself, where you build the plan.

00:08:49.820 You have the report.

00:08:50.480 All the different flow, the questions

00:08:52.360 you need to be asking for the next one.

00:08:54.280 Maybe you do them twice a year.

00:08:55.280 Maybe you do them every three times a year.

00:08:56.920 Maybe you do them quarterly.

00:08:58.500 But you can click the link below to download your copy.

00:09:01.720 If you've liked this video, I would

00:09:03.320 encourage you to smash that Like button,

00:09:05.360 subscribe to my channel, and let me know in the comments

00:09:07.900 below what aspect or what you took away that you liked most.

00:09:11.200 And as per usual, I want to challenge

00:09:12.760 you to live a bigger life and a bigger business.

00:09:14.740 And I'll see you next Monday.

00:09:16.460 Please don't go.

00:09:18.020 Don't go.

Dan Martell - October 07, 2019

How to Upsell to Increase Customer Retention

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