New customers are expensive, but existing customers come way of new customers—you can’t have the former without the latter. And to turn expensive revenue into lean revenue, customers need to be successful immediately. That means from day one sales reps need to assess the renewal and expansion possibilities for any of their prospects. If this isn’t a priority for a sales team then they can be acquiring the most costly of revenue: non-profitable revenue. These are companies that are badly qualified and that aren’t going to have success with your product. They’ll churn at the first possible moment, possibly never even escaping the payback period and remaining an outright cost.
This is one of the first points where your sales and customer success teams can work together. Using their knowledge of current successful customers, customer success managers can spot bad deals before they happen and notify the sales team that a prospect fits this specific profile.
Expand within the team
This is all about demonstrating constant value. If a customer is successful, they’ll want more, so upselling within a team is all about making a customer successful. Customer success can try to find out what other solutions the team uses and whether there is an avenue for offering a complete solution to that team. If something is stopping an expansion, then identifying early whether it is price, product, or training that is preventing the upsell helps the sales team find the right solution and helps the customer be more successful in the long term.
This is why customer success is vital to the upsell sales process. Customer success isn’t just reactive, its proactive. The best customer success teams aren’t waiting for problems to solve, they are out interacting with customers proposing solutions and finding out what customers truly want and truly need. With their extensive knowledge of the customers they can then circle back to the sales department and tell them exactly what a customer is missing and what they would benefit from. Suddenly sales knows exactly what to pitch and to whom.
Expand within the company
If a customer is successful, you will have an active supporter in the organization and therefore can start to look to develop further relationships in the company. This requires a customer success manager who is proactive, looking for how they can help the company beyond the immediate person or team they are working with (while continuing to make them successful).
An important part of this is understanding how to segment customers. Just because the team you are working with finds success in your product, doesn’t mean the rest of the company will. You have to understand the whole company, the challenges of each separate department, and where your solution can fit into each. A good customer success team will always be looking for these opportunities to develop further upsells and feed back the best information to the sales team.
Expanding outside the company
Advocacy doesn’t end at the company gates. One way to drive down the cost of expensive revenue from new customers is to have existing customers acting as your marketing team. This could be through:
- Referral. Word of mouth is easily the best marketing channel. If a customer is successful, they will happily tell all their SaaS friends about you, cutting down on the CAC for those customers. Of course, the opposite is also true. Horror stories about your product or team will just as easily spread through the SaaS ecosystem.
- Testimonial. Using success stories from current customers for case studies allows you to operationalize these positive references. Videos, ebooks, or articles showing how similar customers have succeeded with your product makes the lives of your sales and marketing teams much easier.
By enabling success, customer success can transform these customers into empowered advocates that make it easier for sales and marketing to perform with future customers.
Existing customers are cheaper than new customers. This isn’t news. But it’s important to truly understand how much of a difference these costs can make to your bottom line and your growth. Emphasizing expansion revenue, lean revenue, within your company will allow you to not only grow faster and increase revenue, but it will be on the back of making your current customers more successful. This in turn will lead to reduced costs for new customers through referrals and easier sales.
This positive feedback loop is built on committed customer success and sales teams, that are partnering to bring the most out of customers, making them successful, and making them want your product more and more each day.