Customer Growth: Upselling Hurts Trust (When You Do It Wrong)
When it comes to Customer Growth or Account Expansion (upselling & cross-selling), I assumed people knew that…
…you don’t have to hurt the relationship with your customer to hit your numbers.
…it doesn’t have to be a difficult slog that you struggle through to barely hit your numbers.
…giving CSMs or other non-sales people a sales quota is fraught with danger (on so many levels).
…expansion quotas – and, frankly, most expansion strategies – at best result in incremental growth, doing much damage in the process (which often offsets whatever “growth” they bring)
I assumed… but I was wrong.
I think it’s time to dive into why upselling hurts trust (when you do it wrong).
First, remember that there’s a huge difference between New Business Sales and Expansion. If you don’t know, start there.
Now, forcing products or services on customers when they don’t need, aren’t ready for, can’t be successful with, or otherwise don’t want them is a great way to hurt trust with your customers.
This usually happens because someone came up with an Account Expansion goal the same way they come up with New Business (logo) sales goals – pull it out of thin air (or somewhere else) – and then trying to hit that number without giving any thought as to HOW you’ll hit it or if it’s even possible given the characteristics and Success Vector of your customers.
So then quotas are created for whoever is responsible for expansion: “we need $ 500k in new Annual Recurring Revenue (ARR) from our existing customers in the next 6 months. There’s 5 of you, so that’s $ 100k/ARR each. Go.”
FML! Now what?
Blast. Spam. Pitch. Divert conversations to the (usually generic) offer. Spray and pray, baby.
This method has many side effects, from teaching your customers to ignore your messages and stop showing up for meetings with you because everything is always a commercial pitch, to causing them to full-on churn because they hate you now.
Oh… and when they ignore your sales pitches, they also end-up ignoring your important messages or skipping meetings that would actually help them be succeed… leading to a failure to achieve their Desired Outcome and then… churn.
There’s got to be a better way, right?
The way you avoid hurting trust with upsells is to remember this: as our customers evolve and grow, our relationship with them should evolve and grow, too.
Expansion is simply a PART of the customer’s journey toward their ever-evolving Desired Outcome. Understand the customer’s evolution and growth and figure out a way to put the right product or service in front of them at the right time.
Once you have that figured out, start planting the seeds for these Expansion opportunities with the customer early on so that the conversations that must take place to facilitate the expansion aren’t just expected… but anticipated!
Now it’s not a sales conversation but simply a discussion about the next logical step in their journey to success.
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