Every business aims to increase its revenue by upselling customers and increasing its average contract value (ACV) with each sale. Upselling is the best way to optimize the leads you have already generated and the buying decisions you have already secured. Done correctly, it provides a powerful way to drive revenue, increase net retention rate, and reduce churn.
While upselling is typically discussed in retail and e-commerce, B2B software vendors have even more reasons to upsell customers when they make their initial subscription. That first sale is your best opportunity to prove that your product provides value that’s worth the investment and to become a sticky tool in their tech stack.
In addition to traditional upselling tactics honed in the retail sector, sales acceleration tools can be used to give your customers more appealing options beyond the features and add-ons available through the software itself. Additional functionality, service packages, and financing can become the basis for higher value sales for you and a better practical value for your clients simultaneously.
Let's dive into the best strategies for upselling and increasing ACV for software vendors.
What Is Sales Acceleration?
Sales acceleration is a set of strategies and tools used to increase buyer engagement, motivation, and the velocity of conversions. Sales acceleration can be paired with upselling to help increase the overall ACV by helping you reach leads more effectively, form a better strategy per lead, build a stronger impression, and make it easier for your prospects to choose your product over others.
There are many sales acceleration tools, each providing a unique set of benefits based on the acceleration method.
Benefits of Sales Acceleration Tools
- Identify high-value leads and their motivations
Customer Engagement and Relationships
- Engage leads
- Managed and tracked communication
- Enhanced personalization
- Make your products more accessible and affordable to a wider range of clients
- Expand into new market segments, like SMBs
- Include a wider range of use-cases
- Help clients make decisions more rapidly
- Incentivize sales
Sales acceleration is to upselling what website design is to SEO. It often represents the infrastructure and options available that make buying from your company more appealing - or possible - for clients. In contrast, upselling uses this infrastructure to actively encourage leads to increase their orders.
Upselling Techniques to Use With Existing Customers
Upselling techniques can help you increase each client's order quantity, duration, and variety. The right upselling approach can leave your customers satisfied with their deal while increasing the size of their contract. Upselling your software solutions and subscription services means optimizing the conversion funnel to get higher value deals done faster.
Consider the following classic upselling techniques adapted to the SaaS model.
Understand Your Customer Lifetime Value
A customer's lifetime value (CLV) is their value to the company over the entire period of time they’ll be a paying customer. A one-time customer has a very short lifetime value, but a customer that stays with you for years increases their lifetime value with each subscription renewal and package upgrade.
CLV emphasizes the importance of cultivating long-term customers rather than focusing on the constant search for more leads and new contracts. New contracts are great, but growth only occurs when those contracts are built on a foundation of long-term customer retention.
Take a closer look at your CLV and determine just how much each customer is worth to you and their increasing value over time. The recurring payments involved in an upsold subscription offer a progressive uptick in CLV. By understanding your CLV and how it develops over time, you have the greatest perspective to increase your company's annual recurring revenue (ARR)through new and existing accounts.
Offer Upgrades That Make Sense
Blind upselling is never as effective as upgrades that make sense. While the wrong upsell can lose a customer, a clever and practical upsell can win a client's respect and business. Customers who know their needs are more likely to favor products that allow them to choose valuable, appealing upgrades without paying for features that don't benefit them.
For example, you may have products designed in tiers by team size. Asking a small team to upgrade to the team package with more seats doesn't make sense.But offering them add-ons that give them some of the bonuses of the larger package will make sense. A small team doesn't need 100+ extra seats, but they can appreciate the mobile app control or advanced dashboard features that may be included in the larger packages - and might pay a premium for that access.
For software platforms with a wide variety of departmental tools, you might determine a customer’s niche and offer only the upgrades that fit with their business model. A bakery doesn't need an appointment booking upgrade, but they might love your delivery booking features. It's all about relevance to your customer and the value they will be able to appreciate.
Elevate Your Service Packages
A good service and support package can make or break business software. It's something that your customers who've had a tough time implementing a product in the past will be particularly passionate about. Securing the right level of support, access to self-service tools, upgraded security protocols, and monitored performance guarantees to make a difference.
In a world where responsive software support can be critical to business operations, many customers will gladly upgrade their service package if given a chance. Buying a better service package for many business operators is a best-practices policy, like securing a warranty on new equipment.
Suppose your service packages are clearly built to provide an escalating level of engagement and clear value to customers who upgrade. In that case, many will practically self-upsell by upgrading the support for software they have already chosen to invest in.
Showcase Cost Savings
Show your customers the financial benefit of choosing to be upsold. In the retail world, this might be offering a 30% discount for a larger bundle of goods. The customer pays slightly more in one order to get more value.
But listing the two options with prices below isn't what makes the sale. The "30% off" showcases how much the customer will save in value compared to choosing the smaller, un-discounted purchase.
Translating this to the software sales model, showcase how much more your customers are getting and how much that would cost without taking the upselling deal. For example, you might build a chart that shows how you've pulled features from the higher-tier subscription list for small add-ons instead of the full price of the higher tier. Or you might show how buying two software solutions a la carte offers less value than buying five solutions at a bundled price.
This method can also be used when offering different pricing models. For example, many customers choose a monthly subscription over an annual subscription because their business can't invest that much of their revenue at once.
Using a platform like Gynger, you can show them the cost of a typical monthly subscription, the discounted cost of an annual subscription, and the approachable middle-ground of monthly payments for the annual price. This is especially useful if your team typically only offers annual subscriptions that may be inaccessible to clients on a monthly budget.
Amplify the Benefits
Whatever benefits your customers are drawing from your software or service, offer them an opportunity to increase it. For example, if your subscription package includes 50 uploads a month, you might provide subscription expansions or monthly add-ons to allow for teams who need more. This will enable you to increase your ACV when customers customize their subscriptions to their business needs and makes your product more flexible for a wider range of customers.
Upsell your B2B customers by allowing them to turn up the benefits, either as a universal setting or one desirable benefit at a time. Offer more content, more storage, more horsepower, or more of whatever your customers spend credits on. Customers may need to rev up their benefits for a single month or may appreciate the ability to tailor their subscription to their usage.
One of the original upselling methods is the ‘incentive’. A freebie, discount, or one-time offer are your standard methods, but there are many ways to incentivize an upsell. An incentive is when you add something - typically for free - as a reward for being up-sold.
Take the bundle example. Buying a bundle might be more affordable than two individual products, but a bundle with a bonus is even more motivating. A bundle of enterprise software with a bonus toolkit, dashboard customization module, or upgraded service package is a much more exciting buy than the two original toolkits they came for, and it's clear how they offer more value to the customer’s company.
Your best incentives will be strategy-determined. What kind of incentive would trigger delight and a sense of value when offered alongside an upsell?
Remember that the incentive should make sense with the offer and scale with the package. Offering free usage credits for upgrading to a better package? Be sure to send one for every software seat.
Show a Side-by-Side Comparison
Software and retail upselling both love a good side-by-side comparison. In retail, you will often see a Goldilocks comparison using the Rule of Three: the originally selected product with one lower tier and one higher tier, or two higher tiers if there is no practical lower comparison. In software, the Rule of Three is also prevalent, but with side-by-side lists of features extending into longer lists with higher-tiered options.
But don't stop there. If your subscriptions are customizable, show these custom options in a side-by-side comparison.
Show your customers exactly how they can get more value and save on the price-to-value scale with each account upgrade. Show a side-by-side comparison of your monthly vs annual payment models, your a la carte vs bundled software solutions, or their customized account vs standard packages.
When customers see all of their options, they’re better inclined to make the right decision. This then increases your ACV, especially if they’ve chosen a higher priced tier.
Cross-Selling With an Upsell Offer
Cross-selling is considered a contemporary category of upselling. To cross-sell, you show customers similar products but not an exact linear upgrade to the currently chosen model, often to inspire larger and more diverse final orders.
The "Frequently Bought With" section on any Amazon product page is just this: suggesting you get some toothpaste with your toothbrush, a facial cleanser with your moisturizer, or a pet bed alongside a pet collar.
In software, cross-selling often means offering other software solutions or modules alongside the products your prospect or existing customer has already chosen. You might offer your enterprise bookkeeping module to those who select the inventory management module.
Customers seeking online menu software might happily accept cross-selling for mobile app delivery management as well. You are not offering them more digital menu features but a cross-sell of delivery features in addition.
When clients have reasons to be cross-sold without giving up their first selection, it becomes an up-sell.
Finally, there are the upsells you make just as a client is checking out. This special category does not take place in the usual conversion pipeline. In the self-serve software model, we all know that the checkout process can make or break a sale - especially as business products become more automated and self-managed.
A broken checkout page will almost always lose a sale. But a tempting last-minute upsell can make the entire process more rewarding for the client while increasing your ACV at every opportunity.
Checkout opportunities need to be simple without requiring an extensive re-evaluation. Little add-ons and impulse rewards are ideal, but financial options are also well-placed at this conversion funnel stage. If customers see a better way to pay (in retail, this might be the Affirm button) or a more advantageous option for their business (monthly instead of annual), they will likely choose in a single click while checking out.
Use Financing Tools for Sales Acceleration
We've talked about a lot of ways to upsell your software customers. Most of these methods are up to your sales and product teams. However, some upselling techniques rely on the clever use of your sales acceleration platform.
Gynger specializes in helping software businesses upsell by improving the payment options for your customer. Often, upselling is about making a larger financial commitment feel like a better value for your customers.
Customers will buy a more extensive package for a lower cost per feature. Customers will also commit to a more significant purchase if they can pay monthly instead of dipping too deep into their operating budget.
The right financing tools can accelerate your sales by as much as 60% more revenue per rep. Make your products more approachable for those customers who are cautious about big financial commitments, like small businesses and startups, with a runway to consider.
How Software Financing Works
What exactly is software financing as a sales acceleration tool? Software financing is a smooth, tailored financial product that allows your customers to effectively take a small business loan to pay for their software upfront. Then tools like Gynger build a monthly payment schedule that customers can handle more comfortably than a big annual investment.
What are the benefits of upselling through software financing options?
Grow Your Addressable Customer Base
Expand your Total Addressable Market (TAM) by including those who can only commit to monthly expenses.
Software companies that only offer annual subscriptions are creating a serious barrier to entry for growing businesses. Startups and other small businesses often run with thin operating capital . Their cash burn and runway always being considered, significant annual investments simply don't fit into their financial model. While these companies check off all other boxes as to what makes a strong, qualified lead, you won't be able to close them if they can't adhere to the annual payment commitment.
When you offer software financing and turn an annual cost into a monthly expense, your customer base expands to include thousands of businesses who want your product but can't make yearly financial commitments.
Increase Your Sales
In fact, the monthly budgeting model also has a way of spotlighting affordability - leading to bigger sales. A subscription of $30,000 annually may look big until broken down into $2,500 monthly payments. At this point, smaller teams may be able to see ways to afford add-ons and package upgrades without the final big number burning a hole in their budget.
By allowing your customers to pay monthly instead of annually, you can often spotlight the monthly value in both baseline packages and the upselling upgrades you have to offer. This means bigger sales from both big and small customers who consider their expenses every month.
It may seem counter-intuitive, but software financing can even unlock longer contracts that multiply in size with each year added. Two-year to three-year SaaS contracts are not unheard of for businesses that know they will still need your software during that time. While many companies would not be able to pay a 3-year contract upfront in full, a financing option to spread out those payments is far more approachable and may be the beginning of a long-term relationship.
Software Financing in Your Upselling Strategy
Software financing is a sales acceleration tool because it assists in upselling but is not an upselling tactic itself. Instead, the best way to use a software financing platform in your upselling strategy is during the side-by-side comparison and payment package selection part of the funnel.
Smoothly integrated, your customers will see an option to pay monthly or annually. While cash flow sensitive businesses might turn away if only annual subscriptions are offered, this is your chance to save a sale without giving up the full value of each order and the full annual payment when the subscription is made.
Your customers will enjoy the flexibility of monthly payments through the possibility of financing an annual amount - accelerating their ability to commit to a purchase and feel more confident about upselling choices calculated on a monthly expense instead of an annual expense.
Are You Ready to Increase Upsells?
Increasing upsells in the software industry is about showing your customers value with every choice. This means understanding their business models, motivations, and budgets.
Expand your customer base and make every upsell feel even more affordable by breaking up large annual investments into an approachable monthly package without giving up your ACV. In fact, you can upsell more effectively with financing because each cost increase is distributed visually and practically to your customers as they decide whether or not to be upsold.
If your team is ready to increase their rate of upsells and the average contract value, Gynger is ready to help. With integrated software financing, offering monthly payments accelerates sales and prevents customers from checking out your competitors’ options.
Let Gynger make your software solution the go-to for businesses of all sizes, keeping your margin intact while making your products and prices more financially accessible.
Ready to increase upsells and sign bigger contracts? Book a demo to learn how Gynger can help accelerate sales.