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Cross Selling and Up Selling: Weapons of mass profitability for SaaS

Dans un modèle de services fondé sur l’abonnement, la fidélisation client est le premier facteur de rentabilité et la recommandation client, le générateur de leads le plus efficace !

1 But these are not the only commercial merits of customer loyalty for software publishers: not only does the duration of the subscription determine the level of profitability of the service, but its effect can be literally multiplied by relying on two proven commercial weapons: Up Selling and Cross Selling.

 

Sales people, the new champions of customer loyalty

Let's first take a quick look at how the role of the salesperson has changed since the advent of the SaaS model. As we have seen in our previous articles, the role of the salesperson has changed considerably in recent years:

 

  • Marketing and customer service (via sponsorship operations) now provide them with the bulk of the leads, and even take care of nurturing them to maturity.
  • But more importantly, their role no longer stops at the solution sales stage, but now extends far beyond!

 

As an extension of the traditional "sales funnel", we could now add a second, inverted funnel: that of the amplification, at the customer's premises, of the turnover generated by the sale of the subscription, via the activation of a decisive lever: the development within the account itself.

 

In other words, salespeople have become the new champions of customer loyalty!

Or, more precisely, the successful commercial exploitation of the work done to perpetuate the solution at the customer's premises, largely carried out by the Customer Success Managers with the support of the Support team. And to do this, they have two main weapons at their disposal: Cross Selling and Up Selling.

 

Cross Selling and Up Selling: the two sides of the gold medal

Whatever the sector, the business model of software publishers today is very often based on the following pricing model:

Monthly subscription cost (per user) x Number of users of the solution

For a publisher, there are therefore two levers for improving the turnover achieved with a customer:

1. Add-Ons" logic: adding new functionalities outside the initial scope

This is called CROSS SELLING.

 

 For example, a ticketing software publisher can offer, in addition to the "standard" ticketing administration functions (reservations, multi-price management, ticket edition, etc.), optional modules covering additional functions, such as marketing (sending SMS or emails to customers, for example) or CRM (managing and monitoring customer data).

This allows it to extend the number of potential users of its solution at its customer's premises, in this case from the reception/ticketing team to the sales, marketing and even administrative teams.

2. Up Grade" logic : adding options or superior functionality within the same scope.

This is calledUP SELLING.

 

 To remain in the context of a ticketing management solution, the editor will propose, for example, the management of pre-sales via a network of external distributors, the multi-channel management of sales or the edition of dematerialised tickets on mobile phones... In the context of an email marketing platform, it could be a question of specific functionalities (automated scenario) or simply to manage a larger sending base (higher number of contacts)

 

This allows the publisher to increase the price of the subscription, and thus to generate a higher turnover with a constant number of users.

 

In the first case, it is therefore a question of extending the scope covered by the solution.

In the second case, the aim is to offer more advanced services (to increase the depth of the offer, so to speak) within the current scope. In both cases, this means being able to offer modules or functionalities that are complementary to those already in place.

 

The challenge is to identify the strategic functionalities that will appeal to customers and open the door to new markets. 

 And a point of vigilance, on a strategic level: you must carefully assess your ability to "get out" of your core business and to respond correctly to the client's requirements for less mastered functionalities! This requires you to define and implement an appropriate strategy: internalisation of skills or partnership with an expert player/publisher, for example.

If this aspect is well managed, the impact of this customer capitalisation on your MRR2and the resulting competitive advantage can be decisive. More than ever, customer loyalty has therefore become a business function in its own right!

 

1: See our article on this subject:

Defining the right business model: the big challenge for software publishers!

 

2: For "Monthly Reccurring Revenue".

Adopt a tool adapted to your activity and your expectations: choose the CRM... In order to better understand the usefulness of the latter and to choose an adapted CRM, watch this webinar:

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