It may sound crazy to be talking about an upselling strategy in the midst of a world-wide crisis like Coronavirus, but the harsh reality is that companies and individuals who are not working extra hard to keep their revenue driving forward during a time like this will be left vulnerable. Upselling is one of the most powerful ways to increase revenue during lean times because it leverages the power of existing relationships with customers who already trust you and respect your brand.
My guest on this episode is Victor Antonio, the author of 13 books on sales and motivation and the creator of the Sales Velocity Academy, a learning platform with 500+ videos. His new book being released soon is on the topic of upselling.
During this episode of the #ModernSelling podcast you’ll hear why he’s so enthusiastic about the subject. Plus, you’ll have the opportunity to pre-order his book so you can be among the first to read it once it’s released.
This episode is sponsored by XANT, the enterprise leader in sales engagement. Xant has authored the Definitive Guide to Sales Cadence. Get your copy at www.SalesCadenceGuide.comIt’s Not Surprising That Most Companies Have No Upselling Strategy
The average company shoots for a 10% to 15% growth rate year over year. That’s pretty aggressive and sales teams are typically busting their humps to meet their quotas. Victor says that in light of that kind of pressure, why not approach existing customers—who are essentially warm leads—to generate new opportunities? It’s called upselling and while it’s not a revolutionary idea, it’s one that many companies have ignored to their own detriment.
In researching for his new book, Victor discovered that nine out of ten companies admit that upselling is not part of their training process. This shouldn’t be surprising since 30% to 35% of companies have no official sales strategy or referral process.
That means that upselling (and its close cousin cross-selling) is nothing more than an afterthought. In Victor’s words, “If it’s not part of the process, it doesn’t get done.”Coordinate And Compensate Sellers And Account Managers to Upsell More
Victor says that much of the reason upselling takes a backseat to inbound and outbound sales is that in most compensation plans for salespeople or account managers don’t encourage upselling. When you structure compensation based on upsells that happen in an account, then sellers and AMs have a reason to work together to generate more revenue.
The Account Manager’s default attitude is often, “Service the customer. Make them happy.” That’s great, but additional revenue generation needs to be part of that mindset as well. The one-two combination of a great salesperson and an upsell-focused Account Manager could bring in tremendous amounts of additional revenue. In fact, Victor says it can generate up to 30% of all sales!
His point is simple: Unless you have great compensation plans that reward what you want to see (upsells), you will not modify behavior—and everything depends on behavior.Poor Ability To Upsell Is A Sales Management Issue
No matter how good a salesperson is, no individual secures 100% of the possible revenue that could be generated from a customer. That means when they hand the new customer to the Account Manager there is plenty more potential revenue available from the opportunity.
But here’s the problem: The average Account Manager manages well over 100 accounts. There is NO WAY anyone can manage and upsell that many accounts effectively. In fact, according to Gartner, only 28% of sales leaders agree that account management channels regularly meet cross-selling and account growth targets.
Victor says this is a sales management problem. Many sales leaders believe that the Account Manager’s job is mainly the management of accounts, not upselling. How can Victor say that so confidently?
Because managers load AMs with so many accounts they can’t possibly upsell—AND they don’t offer compensation packages that reward upselling. Victor says that compensation plans need to include an upselling quota and some form of measurement to show how AMs are engaged with the upsell process in order to reward - and change - that behavior.How Does Upselling Compare With Inbound And Outbound Sales?
When considering new revenue, most sales leaders automatically think of two options: Inbound and outbound sales. Victor says that upselling is the third option and should be considered as seriously as both inbound and outbound sales.
In our conversation, Victor compared the three to show the pros and cons of each:Outbound Sales:
PRO: You can control who you’re going to contact, which means you have control over the quality of your leads.
CON: It takes nine to 12 calls just to make contact (not get the meeting).Inbound Sales:
PRO: You create good content and the prospects come to you—and the costs and frustrations are typically lower.
CON: You can’t control the quality of the leads. Tire kickers are plentiful.Upselling Existing Customers:
Upselling is like outbound sales but you’re pitching to customers who are already spending money with you. Victor refers to it as “Outbound Prime.” If you’ve serviced them well so far why would they not buy from you again?
Listen to learn how to create an upselling strategy, compensate everyone involved, and drive new behaviors from your sales and Account Management teams that could produce up to 30% of your overall sales!
This episode is sponsored by XANT, the enterprise leader in sales engagement. Xant has authored the Definitive Guide to Sales Cadence. Get your copy at www.SalesCadenceGuide.comOutline of This Episode