Tech Companies: How to Be World-Class at Up-Selling and Cross-Selling


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Cross-selling and Up-selling Drive Growth

For technology companies, excellence in cross and upselling is vital. While the average SaaS company realizes 15% ARR growth from cross- and up-selling, the Top 10% achieved nearly triple that level (41%) while the Bottom 10% got nearly none at all (2%).1

Cross and upselling are also highly profitable. It costs $1.32 in sales and marketing to acquire $1 of ARR from new customers. However, it only costs $.38 for each $1 in expansion sales and $.72 for each $1 of cross-selling.2

What separates the companies in the Top 10% from the rest?

In short, Leaders have systematic programs to identify, target and nurture customers for cross-sales and up-sales while average performers use a one-size-fits-all approach.

To illustrate the one-size-fits-all approach, I’ll share an example of our own experience of what it is like to be on the receiving end of one. About a year ago, I got a call from our Account Manager for our CRM vendor. He wanted to discuss the new release of their emarketing suite. After a couple of minutes of listening, I explained to him that their emarketing suite, which was designed to manage large numbers of inbound web leads, was not a fit for our business as that was not the way we marketed our services.

I subsequently received an invite to a seminar on the emarketing suite, an email offering me a free trial for the emarketing suite, and the chance to meet the emarketing suite product manager when he was in town. Six months later when the next emarketing release came out, we went through the whole cycle again.

If they hadn’t spent so much time trying to sell me the emarketing product, could they have sold me something else? I don’t know because they never asked me what my needs were and never presented what they did have that might have been of interest. Even if the answer was nothing, at least they wouldn’t have wasted time, effort and goodwill trying to repeatedly pitch me the wrong product.

In Topline’s experience, this one-size-fits-all mismatch is widespread. Other examples we have seen include:

  • A company selling SAP monitoring solutions attempting to cross-sell monitoring solutions for mobile applications to companies that have not deployed any mobile applications
  • A security company marketing the value of their integrated suite to customers who are explicitly pursuing a best-of-breed strategy and integrating individual products together themselves.
  • A software company offering a special discount to customers to move up to the next licensing tier when the customer had already licensed the solution for everyone in their company who could use it.

When you consider these examples, a one-size-fits-all approach may seem silly. So why do so many companies do it? We have found 2 primary reasons.

1. Companies mistakenly see one-size-fits-all as a positive, not a negative.

While these numbers vary tremendously by company and product, take rates for most cross-sell products are typically in the 20% to 40% range and only 60% and 80% of customers are candidates to buy more of products they already have. In most cases, companies may acknowledge conceptually that not every customer needs every product or more of what they already have, but perceive that trying to cross and upsell all of their products to all of their customers is actually a benefit. Their view is “you need to let your customers know about all of your products or ask them to buy more of what they have, otherwise you’ll never sell them.”

What they don’t recognize is the downside to this approach — wasted resources on sales that will never happen, missing real sales opportunities because customers have tuned out what they see as a steady stream of irrelevant messages, and the creation of a transactional instead of a strategic relationship as customers do not think their vendor really understands them and what they need.

2. Companies don’t have the knowledge, systems, and processes to manage a program to identify, target and nurture upsell and cross-sell opportunities.

Even when companies do recognize the issues with one-size-fits-all, they often don’t have the ability to do it differently. Here, the CRM company example can help illustrate the challenges of building a true world-class cross- and up-selling capability.

First, the company would have had to build a segmentation model to identify which types of marketing models were good prospects for their emarketing suite and then train their Account Management team on how to identify a good prospect

Second, the company would then need to gather account-level data so that it could actually place each of their customers into the right emarketing suite segment. In most cases, this kind of data is not available from outside sources and can only be learned by asking customers explicitly.

Third, they then need a place to record that data in a way that was actionable. I suspect that this is where things broke down with my CRM rep. Telling him that I don’t need emarketing went in one ear and out the other because there was no system to capture it and even if it was captured, there was no way to do anything with it.

Fourth, the team responsible for cross-sell marketing would need to actually use the data to align their programs with my interests (or in this case, lack of interest).

Finally, the company would need to repeat this process for each of its products.

How to Get Started

If this seems hard to do, there’s a good reason for that. It is… but the benefits of being in the Top 10% are worth it.

We recommend a take it slow approach that starts with one product for one market segment. The product you select should be your most important so that the company stays engaged and committed to following through. Once you’ve selected your product:

  1. Build a segmentation model for the product. What are the 1 or 2 characteristics that separate current prospects for the product from future prospects to companies that are never going to be prospects? In the case of the SAP monitoring company, their research had found that customers bought once they had implemented 1 customer-facing mobile application or 1 mission-critical application. The critical characteristics, in this case, are a) How many mission-critical or customer-facing mobile applications does the customer currently have deployed and b) How many does the customer expect to have in 12 months?
  2. Capture the segmentation information for as many accounts as possible. This often feels like the most daunting part of the process and usually requires a multi-pronged strategy. For the monitoring company, there were 4 separate tactics.
    1. Reviewing customer websites and the App/Play Stores to see if customers had any customer-facing applications posted.
    2. Adding questions to their semi-annual NPS survey on the number of current and expected mobile applications
    3. Having the CSM and Support teams ask when they spoke to the customer
    4. Adding the questions to their onboarding questionnaire for all new customers
  1. Design a customer engagement playbook. Like the playbooks used for new logo sales, similar playbooks need to be designed for cross-selling. In the case of the monitoring company, they developed two separate playbooks – a sales-led playbook for customers who were ready to enter a sales cycle now and a tech-led nurture playbook for ones that would become prospects over the next year.

Once the first product/market segment is successful, the program grows from there.


1. KeyBanc Capital Markets 2018 SaaS Survey, Topline Strategy Analysis and Estimates

2. KeyBanc Capital Markets 2018 SaaS Survey

Jonathan Klein
Jon is the founder and Managing Partner of The Topline Strategy Group, a boutique strategy consulting firm that specializes in Market Strategy and Strategic Customer Experience for technology businesses. Jon brings a unique mix of strategy consulting and hands on operating experience to his work at Topline. Prior to founding the company, he held senior marketing roles at three venture-backed software companies and served as a Case Leader at The Boston Consulting Group. He holds an MBA from The Kellogg School at Northwestern and a BS in Electrical Engineering from Cornell University.


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