The conversation included Chief Revenue Officer Conor Cox, Customer Growth Manager Scott Tower, and Customer Success Manager Jasper Goodwin. In this blog, Conor takes us through the SaaS upselling techniques shared in the show.
Or does the nature of your revenue strategy mean that customer success is actually the better fit?
If your CSMs are doing all of the work related to expansions, it’s only fair that they should receive the commission for successful upsells.
But how do you handle pushback from AEs when taking commission opportunities away?
We transferred upsells from sales to CS and the transfer—though challenging—worked.
Our CS team is commonly net expanding 120% average per year for the customers that come in through our account executives.
Here’s how we did it.
In most industries, sales reps own both upselling and cross-selling. Think of a wireless retailer. The rep will sell you a new iPhone and then upsell you on a phone case. When you come back with a question about your bill, he’ll act as a customer support rep and then sell you a new unlimited data plan.
But in the SaaS world, customer success teams have to do a lot of heavy lifting to help customers deploy the software, onboard their data, train their teams, and then expand to new seats.
At many SaaS companies, CS teams don’t get a cut for this work. AEs will come in and grab the commission for the upsell after the CSM has helped the customer succeed.
But does that mean you should transfer the commissions to CSMs? Salespeople are natural and highly trained sellers. Revenue executives might fear that handing over the reins to CSMs will result in lower expansion numbers.
There’s no easy answer, and it will be different for every company.
Why we decided to transfer upsells to CS
At Proposify, we decided to give customer success the commission for expansion revenue because we hypothesized that it would be better for our customers and the company.
We didn’t want our CSMs to feel slighted or resentful at not getting a commission for the work they do.
We also felt that transferring the commission to CSMs would be better for our customers. The CSMs know them best and would be able to make the right recommendations, at the right time.
Focusing on our customers and company culture gave us the motivation we needed to transfer upsell commissions from sales to customer success.
Our process for transferring ownership to CS and training them in upselling
Because we use the land-and-expand strategy, there are a lot of potential commissions in upselling. Not only did we have to smooth things over with our AEs when we made the transfer, but we also had to give our CSMs new upselling skills so our revenue would grow.
Here’s how to do it:
Step 1. Identify issues with your current upsell strategy
The first step is to figure out where your current upsell strategy is failing.
At Proposify, we were dealing with these challenges:
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Customers were sometimes being pushed into an upsell that didn’t really suit their needs.
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Customers were being asked to upsell before the time was right.
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We wanted to build a best-in-class CS team, and knew we couldn’t do that with unfair comp structures.
Focusing on our customers and company culture gave us the motivation we needed to transfer upsell commissions from sales to customer success.
Step 2. Let sales know your plan to transfer the commission, and iron out any issues
We did get some pushback from a couple AEs. One person said that they would just sell more seats initially to get the biggest commission. But we knew that would be a disaster because big initial implementations can lead to failure.
Ultimately, we had to explain this very real threat. It all comes down to hiring and retaining the right people who are willing to do what’s best.
Fortunately, the vast majority of our AEs understood the need to share commissions. And now, for our upmarket leads, an AE and CSM will sometimes work together in sales pods because we need the CSM’s expertise when it comes to implementation in order to close the deal. In rare cases, a CSM will actually get a commission split for the first deal.
Step 3. Share knowledge and best practices from the sales team with CSMs
Assuming you do have the right people on your sales team, they should be ready and willing to give their advice. Talk with them about what’s working with upsells.
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What types of conversation starters and questions lead to successful upsells?
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When are customers most likely to upsell?
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How can you identify upsell opportunities?
Make sure to transfer as much knowledge as possible, so that CSMs are set up to succeed.
Start by offering commissions to a CSM who has a knack for sales—someone who is very business-minded. Then, use their feedback to improve your training and rollout out upsell ownership to all CSMs.
Step 4. Trial your SaaS upsell techniques with your most sales-focused CSM
When you’re ready to hand over the reins to customer success, don’t do it all at once. Start by offering commissions to a CSM who has a knack for sales—someone who is very business-minded.
Share the strategies and techniques from sales with this person and allow them to start upselling some of their accounts.
Then, use their feedback to improve your training and rollout out upsell ownership to all CSMs.
A “no” isn’t really a “no.” It’s an opportunity to learn what we could be doing better. This mindset shift puts upselling back in the realm of customer success and helps CSM see it as a natural extension of their job.
Step 5. Help remove blocks and barriers for CSMs who aren’t used to selling
You’ll need to help CSMs get comfortable with selling.
One of the best ways to do this is to ask them, What’s the worst that could happen? The answer is that the customer could say “no.”
Help remove their fear and remind them that a “no” isn’t really a “no.” It’s an opportunity to learn what we could be doing better. This mindset shift puts upselling back in the realm of customer success and helps CSM see it as a natural extension of their job.
Step 6. Use unsuccessful upselling conversations to research customer issues
When CSMs do receive a “no” from a customer, they should find out why and discover any unknown problems the customer might be facing.
Perhaps that customer’s implementation isn’t as successful as the CSM thought.
Here are issues to dig into:
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Is the customer achieving the results they hoped for?
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Is the customer able to measure the results they’re getting from the platform?
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Are any team members struggling with onboarding or using advanced features?
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Are their issues and questions being handled promptly?
Once problems are resolved and some time has passed, the CSM can bridge the upsell conversation again.
Step 7. Continue to evolve how you share the work
When we were a smaller team, it made sense for sales to handle expansion and receive the commissions. But now, giving the upsell commissions to our CSMs is our best play. The ways that we organize upselling could very well evolve again in the future.
We’ll always be listening to issues from our teams and our customers to blaze new trails in our company.
If you want to learn more sales and revenue strategies, be sure to check out The Closing Show! These are short, 5 to 15-minute conversations deep from the trenches.
