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The Science of Cross-Sell and Upsell

June 28, 2018

Organizations must implement consistent processes for creating demand within existing customer accounts

B-to-b cross-selling and upselling are complex processes that require a full supporting cast to help sales behind the scenes. While few would argue that selling more to existing customers is not a vital initiative, many organizations fail to set defined roles and processes for cross-selling and upselling. In this issue of SiriusPerspectives, we introduce a five-step approach for implementing a more structured and consistent approach to cross-selling and upselling.

Ensuring Clarity

An important prerequisite to planning and executing effective cross-selling and upselling strategies is ensuring clarity on key concepts. Establishing agreed-upon definitions for the following terms helps all contributors remain aligned throughout cross-sell/upsell processes.

  • Upselling. Upselling is a coordinated effort between sales and marketing to create additional demand in existing buying centers.
  • Cross-selling. Cross-selling is a coordinated effort between sales and marketing to create demand in new buying centers within an existing customer account.
  • Buying center. A buying center is a function or department within a company that has distinct buying authority.
  • Buying group. A buying group is the set of individuals within or associated with a buying center that is involved in the process of purchasing a product or solution.
  • Demand unit. A demand unit is a buying group with known and validated business needs that is activated to find a solution that the selling organization addresses.

Step One: Alignment

Although many functions can provide information that supports efforts to sell to existing customers, they often act independently, failing to share insights that would be useful for another function. The first step in the cross-selling and upselling process is aligning internal departments to provide transparency across functions and ensure that they share essential information.

  • Align key internal functions. Sales (direct or channel) plays the lead role in outlining goals for selling into the existing customer base. This includes identifying where growth is expected and where help is needed from other functions, especially the marketing team and specifically customer marketing if it exists. Other functions, such as demand marketing, customer success, portfolio marketing, product marketing, sales operations, marketing operations and the finance organization, play supporting roles.
  • Determine how insights are integrated. Decide where and how internal teams’ contributions can be leveraged to support sales’ cross-sell and upsell efforts. Start with the sales account planning process, where these functional insights can provide critical insights for sales plans. Contributing functions also should participate in quarterly business reviews or other regularly scheduled sales reviews.

Step Two: Identification and Prioritization

While all existing customers are theoretically targets for cross-sell and upsell, some offer better potential than others. The next step is to assess each account’s potential in order to prioritize accounts that are more likely to buy.

  • Map buying centers. Locate specific buying centers within each customer account, potential buying groups and current white space by company solution.
  • Assess buying center need. To become a demand unit – and a candidate for cross-sell and upsell – a buying center must demonstrate appropriate needs, which are then evaluated according to solution fit and the urgency of solving the need.
  • Score demand unit needs. Score demand units using the criteria identified in the previous step (needs, fit and urgency). Use a simple three-level scoring rubric to rank the demand units (note that absence of need is a disqualifier).
  • Assess buying group dimensions. Criteria include the state of current buying group data, the state of relationships within the buying group, and the purchasing power (resources) known to exist.
  • Score demand units. Use a three-level scoring rubric to evaluate relationships, data and resources for buying groups.
  • Enter demand unit scores into demand map. Enter buying group scores and needs scores to provide a comprehensive view of cross-sell and upsell potential.
  • Create a cross-sell and upsell priority matrix. Plot the demand units on a matrix to visualize how they should be prioritized.

Step Three: Collaborative Planning

Because several internal functions engage with existing customers, include their contributions to the planning process for cross-selling and upselling. It’s also helpful to incorporate a view of the customer lifecycle to add more context to existing customers’ relationships with the company.

  • Required account insights. Sales should provide an assessment of current relationship status for upsell and suggestions on potential relationship expansion/development for cross-sell. Supporting functions such as customer success, customer marketing, customer support and portfolio or product marketing teams can provide information on customer engagement, onboarding participation, product adoption and support cases filed, as well as data that illuminates potential cross-sell and upsell opportunities.
  • Cross-sell/upsell planning components. Construct comprehensive plans that outline each function’s responsibilities in cross-sell and upsell processes. Distinct plans for cross-sell and upsell should be developed by customer marketing or demand marketing leaders, with input and validation from account owners. Include a comprehensive view of contributions by role, implications of customer lifecycle phases, and an overview of the communications schedule.

Step Four: Execution

Marketing (customer marketing if it exists, or demand or campaign marketing) has the primary responsibility for developing an execution map to bring the collaborative plan to life. The map shows what actions will be taken and which assets will be used in support of cross-sell and upsell goals.

  • Leading function. Because of its depth of knowledge and relationships with contacts in existing accounts, sales usually leads upsell efforts. For cross-sell, however, sales often asks for increased marketing support to help identify and penetrate new buying centers.
  • Program family focus. Identify which of the marketing program families (demand creation, sales enablement, reputation, market intelligence) are most relevant. The program family focus depends on whether cross-sell or upsell is required. For example, because cross-sell enters a new buying cycle with new contacts, more demand creation focus is appropriate.
  • Product or solution. Assess which products or solutions are likely to be good matches to support cross-sell and upsell efforts.
  • Assets and interactions. Using insights about existing or new buying centers, identify appropriate content assets and interactions (e.g. data sheets, case studies, testimonials, webinars, thought leadership, influencer content, events) that are available to support cross-sell and upsell efforts. Customer advocacy assets gathered from satisfied contacts in existing buying centers can play a particularly important role in cross-sell.
  • Delivery mechanisms. Consider what delivery mechanisms are most appropriate to support cross-sell or upsell, factoring in the preferences of contacts in existing buying centers gathered via direct interaction or through preference centers.

Step Five: Measurement

The final step addresses the need to monitor and measure cross-sell and upsell performance. Choose from four classes of metrics – readiness, activity, output and impact.

  • Upsell metrics. Readiness metrics for upsell include an inventory of the contacts within the existing buying center and their levels of engagement. Activity metrics include the number of events, webinars, emails or other elements delivered to existing buying center contacts to support upsell efforts. Output metrics reflect the results of those activities (e.g. inquiries, participation rates, advocacy assets created). Impact metrics demonstrate how upsell activities are contributing to the achievement of high-level business goals (e.g. customer satisfaction, retention, loyalty and revenue growth from existing buying centers).
  • Cross-sell metrics. Readiness metrics for cross-sell include contacts identified and verified within new buying centers, along with any buying center profiling completed. Activity metrics may include the number of activities delivered to contacts in new buying centers. Output metrics reflect the level of participation of contacts in the new buying center. Impact metrics demonstrate how cross-sell activities are contributing to the achievement of high-level business goals (e.g. number of new buying centers, revenue from new buying centers).

The Sirius Decision

Many company leaders recognize that it’s far more efficient to retain and grow existing customers than to pursue new relationships. However, when it comes to cross-selling and upselling, they often seem to lose sight of this principle. Instead of leaving cross-selling and upselling processes to chance, coordination from multiple functions is required to execute through collaborative planning, crisp execution and the use of available technology. The first step is to recognize that a problem exists: Significant opportunity is being missed due to lack of alignment around cross-selling and upselling. Instill alignment around these efforts by establishing MBOs tied to account growth and socializing relevant dashboards to maintain visibility and transparency across the organization.