Subscription service renewals should start on day one. When should upsells?
As someone who spent almost twenty years selling subscription-based research, data, and software services, the majority of which was in Account Management (AM) roles with aggressive Net Revenue Retention (NRR) targets, I am very familiar with the pressure AMs are under to not only retain but expand business. This pressure can often drive them to attempt to upsell initial users and add new ones prematurely, i.e. before the existing users have been successfully onboarded and begin to realize value at an individual level. As a cancellation can be devastating to an Account Manager’s book of business and overall achievement of quota, it’s critical to earn the right to introduce additional services to existing users and secure referrals to other people, teams, and departments within the account.
What is “earning the right” to upsell?
Particularly at companies that do not have a dedicated Customer Success function, Account Managers need to acknowledge that helping customers realize value is not only the right thing to do, it is also paramount to achieving their personal commercial goals. Helping customers to do so begins with a successful account transition from new business Account Executives (AEs) to Account Managers. Before an AM is introduced to the new customer, a successful transfer of knowledge from AE to AM is critical. This involves sharing information about not only the company and individual users (and their respective reasons for buying and goals), but details about the sales process, including budget contributions, key influencers, and decision-makers. The last thing that a new customer wants to hear from their newly-assigned AM is “Tell me about yourself (or company)?”. Instead, AMs should lead with “(AE name) told me XYZ about your role and goals. Is there anything else I should know to help me make your use of (product/service) as productive as possible?”.
In cases where Customer Success Managers (CSMs) are also involved in supporting customers, they should be involved in both the internal AE-AM transition call as well as the customer “kickoff call”, not only to present a unified support team to the customer, but also to avoid requiring the customer to take additional time to repeat themselves. While the AM and CSM should come prepared with recommendations about the onboarding plan and process, such recommendations should be validated and approved by the customer. It is also important to realize that as each user may have different roles and goals, subsequent training and support needs to take that reality into account. As is the case in the initial sales process led by the AE, while it’s valuable for individual users to be aware of the full range of functionality or content, the focus of onboarding should be on the elements that are most important to them.
Once a new user can see that the AM cares about their personal success and dedicates resources to ensuring it, they are much more likely to refer them to their immediate teammates and other departments. Building successful coaches and champions is the direct result of making initial “core” users successful.
When should upselling and expansion begin?
While Account Managers should not attempt to sell additional services to new users until they begin to recognize real value from their existing services, this does not mean that AMs should not begin to identify opportunities for growth early in the relationship. This can be done in an effective and customer-centric manner by getting to know more about individual customers over time. By asking the proper questions and monitoring how users are leveraging existing services, AMs/CSMs can begin to uncover unmet needs and limitations. Once existing users realize that the AM has their best interests in mind, AMs can begin to introduce incremental services-so long as a valid need has been identified. They can then also begin to ask for their advice and opinion about whether particular services could benefit other people within the company. For example: “I value your opinion. We’ve helped other customers with XYZ. Do you think that (colleague) could potentially benefit from this feature? If so, would you be open to making an introduction?”.
As each customer and situation is unique, there is not a uniform duration into an annual subscription term at which an Account Manager should begin to upsell an existing user or expand an account. However, the process of gathering information should in fact start early on in a relationship. The key is more in the “how” than the “when”. Keep customers’ best interests in mind and the “when” can begin a lot sooner.
