Sales Growth – Dutch Uncles

Sales Growth in SaaS Product- The Scaling stages

Avijit Dutta — Fri, 19 Feb 2021 10:35:04 +0000

Explore the right conditions for change

There are three-stage of the sales funnel for a SaaS product, namely: Awareness, Education and Selection. In the awareness phase a potential customer discovers the existence of the product. He/she also becomes aware of the problem and the negative impacts of the problem going unsolved. In the education phase the SaaS marketer presents her product as a solution. Also, the prospect explores alternative solutions during education phase. In the selection phase the prospect selects a particular product and signs up for a trial.

However, the sales cycle doesn’t close here. A sale is closed only when the trial user converts into a paying customer. It happens at the end of a successful trial period with the customer upgrading to a paid plan.

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A sale is closed only when the trial user converts into a paying customer.

Beyond the stages of the sales funnel, there are three more phases of significance here: Onboarding, Impact and Growth.

Onboarding

Once a prospect signs up for a trial she is onboarded. It means creating an account for her business, setting up the system, data migration, integrations and user training, etc.

Impact

This is when a customer tastes an early success using the SaaS product. A quick fix solving a low hanging problem for the user is the key here. Impact is the result that the customer was looking for.

Growth

Customers buy a solution with a desired result. They don’t care much about how you solve the problem as long as you solve the problem within his budget and time. Growth happens in the form of an upgrade, renewal or referral when we have created a remarkable first experience (let’s call it RFE) for the user and solved a real problem he or she had.

Let’s have a quick look at a growth-matrix for a SaaS Product

In this 2X2 we have product features (existing, new) on horizontal axis and user type (existing, new) on another. When we sell the same feature to the same user, it is called renewal. When we sell the same feature to a new user, it is called re-selling. If we sell a new feature to an existing user, it is called upsell. Finally, if we sell a new feature to a new user, we might call it a cross-sell.

The typical growth journey of a SaaS product can be put into four stages:

Stage 1

It starts with onboarding some prospects in a target market as trial users, then creating an early impact to ensure renewal of these trial users into paid customers.

The goal here is to ‘recruit’, say, your first 100 users, iterate quickly through early versions to get closer to solving the right problem for the right person.

Stage 2

In this stage we sell the same product features to many other similar users (resell).

The goal here is to increase our reach to 1000s of customers and continue rapid learning and product innovation.

Stage 3

Till now if the product-market-fit is reached, the company ventures into developing extended features for the same customers hence gets into upselling.

By this time your offerings are getting matured. The goal here is to scale within the same domain, upsell new features. You might have up to a million users at this stage.

Stage 4

At this stage the company has more information about the market and the need for the end-users. Hence it might pivot or expand into adjacent markets by building a new product or a new feature for new customers.

The goal is to sustain growth and protect the business you have built through deliberating on all four levers of growth.

There are two necessary conditions for change for a SaaS Product:

Broaden your definition of a sales funnel from a three-step (awareness, education, selection) to a six-step (also onboarding, impact, growth) process.
Identify your growth stage (among the four described above) and align your sales and marketing team accordingly to create maximum sales using the four levers of growth (renew, re-sell, up sell & cross sell)

Read the three-step solution in overcoming the top five marketing challenges in SaaS industry.

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40% year over year, Freshworks Impressive Growth

Smruthi Krishnan — Fri, 19 Feb 2021 06:35:03 +0000

Freshworks Inc recently announced that they crossed $300M in Annual Recurring Revenue (ARR) scaling the business by 40% year over year even when there was a global pandemic crisis. ARR is a key metric used by SaaS businesses which have term subscription agreements or defined contract lengths. Freshworks is an intelligent customer engagement software company which launched new products in 2020, made strategic acquisitions in AI and expanded its executive team to drive the growth perspectives of the company. It is now moving towards the billion-dollar revenue milestone.

Freshworks SaaS products are easy to use and offer speedy returns on investment. Operating from 13 global locations, the California headquartered, Freshworks serves customers across the world. With the mission to help companies across the globe survive the COVID crisis and help them tread over unknown waters without facing losses, Freshwaters acted as a lifeboat for hundreds of firms and helped to create the best for their clients and their customers.

Freshwaters aims to create a one app platform so that companies do not have to work in silos. This helps achieve better alignment between the sales and marketing teams within the firms and makes it a smoother experience for your customers Freshworks CRM (formerly Freshsales). They have adaptive, advanced AI capabilities; Freddy AI’s powerful automation capabilities help comprehend customers and provide insights, predictions, recommendations from your CRM data thus resulting in better decision-making processes. Freshworks also help engage better with customers through best leads and personalized and behavioural based conversations.

Successfully closing two acquisitions in 2020, Freshworks acquired AnsweriQ, a provider of ML and AI for larger enterprises which complements Freshworks existing AI engine, Freddy. Together they help companies to scale self-service experiences and automate complex customer workflows using existing customer data. They also acquired Flint, an IT orchestration and cloud management platform to improve their IT service management operations management capabilities. This helps them manage hybrid infrastructure and automate employee workflow while spending optimally.

Forbes Cloud 100 named Freshworks the #16 top privately-held SaaS companies while Glassdoor and Battery Ventures named them in the top-25 private cloud companies to work for during the COVID-19 pandemic. Freshworks was named a Strong Performer the Forrester New Wave: Chatbots For IT Operations, Q4 2020.

With Freshworks CRM, a single solution with unique capabilities that delivers personalized conversations and unifies the customer journey, Freshworks has an immense potential for further growth as they work on new acquisitions, better team and updated technology. They aim to reimagine the customer data platform so as to improve lead conversion and sales growth for their clients across the globe.

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How to Sell Better: The Art of Upselling

Tanisha Achrekar — Mon, 25 Jan 2021 03:49:05 +0000

Increasing sales is the goal of any business. Be it the vegetable vendor in your vicinity or Amazon, the biggest e-commerce. It does not matter how small or big a business is, their aim is always to sell more. Attaining more customers is one of the no-brainer ways of increasing your sales. Can you make more money with the same existing customers that you have? Yes, if you know how to cross-sell or upsell your products to them. Let us have a look at how upselling works.

What is upselling?

Upselling is a sales technique used to offer an upgraded and premium form of the current product that a consumer is buying. The product that is sold in upselling usually has more features or is bigger than the existing one. That is why it usually is also at a higher price point. Upselling is a great way to increase sales as well as conversion rate.

The pizza you order in Dominoes is available in three sizes usually – small, medium, and large. It is the same product but in an upgraded size. If the seller here manages to sell you a large pizza instead of a small one, he is upselling, even when you are sold an iPhone 12 pro instead of an iPhone 12. The upgraded or premium version is an upselling technique.

What are the benefits of upselling?

Sales techniques are not about deceiving customers but a way of enhancing their shopping experience with your business. It is about exceeding their expectations and providing value for money. Read below to know why you should use upselling strategies in your business –

Helps in building a deeper relationship with customers

The sales department of any business has an opportunity to create a relationship with the customers. The deeper the bond they build, the more likely it is that the customer will come back for more. When you are offering an upgraded or premium version of the product/service that a customer is looking for, you are exceeding their expectations. This builds a sense of trust amongst the customers as they are being offered even better products than what they came looking for.

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Approach each customer with the idea of helping him or her to solve a problem or achieve a goal, not of selling a product or service.

- Brian Tracy

Boosts Customer Lifetime Value (CLV)

The overall contribution that a customer makes in your net profit is known as Customer Lifetime Value (CLV). Most people swear by specific brands and only prefer using those products like Zara for clothing, Honda for cars, iPhones for their smartphones, Maggi for noodles. The CLV of such customers is quite high towards these brands.

Upselling your products usually also increases the CLV as the product is more expensive than the one the customer was buying previously. Also, upselling a product does not involve any extra investment. This makes the overall process quite cost-effective.

It is comparatively easier than acquiring new customers

Getting new customers is an expensive and time-consuming process. It requires a business to constantly keep proving they are better than their competitors. A more effective way to optimise how you sell is through cross-selling to existing customers. If existing customers are coming back then they definitely like your products/services. Offering them an upgrade on those is definitely worth giving a shot. You have almost a 70% chance of upselling to an existing product. However, to a stranger, the chances are slim to none.

How can you go about upselling your products/services?

Upselling a product can seem daunting if you are a beginner. As selling a product in itself is a challenge, upselling it may feel overwhelming. You can harness your upselling skills by practising certain techniques and strategies like:

Give the right upgrade to upsell

When you are offering an upgrade to the existing product that the customer is purchasing, ensure that you choose the perfect one. An upgrade should be bigger, better, stronger, basically more advanced in any manner. Ensure that you are fulfilling your customer’s expectations. Trying to sell an odd upgrade can cause trust issues with the buyers.

Don’t be pushy or needy

While upselling any product, timing is everything. You do not want to annoy the customers by being too pushy or needy. It can irritate them and then the chances of selling anything reduces significantly. When you are providing an upselling option, you need to ensure that you are not being too cocky. The last thing you want is to lose a customer.

Always attempt to upsell

Upselling may seem daunting, but be confident and always at least give it a try. The more you attempt to offer an upsell, the more likely more customers will buy those. The customer may or may not know that an upgrade or advanced version of the existing product is available. Also, they may not know what difference the upgraded product makes. To give them this information is your job.

Ensure the upsell is relevant to the current purchase

Upselling is all about having relevant and updated information. This comes even handier when you are selling technology products. If a person with a budget is asking you for an android phone. It does not make sense to offer them an iPhone. Here even though there is an attempt to upsell, it is irrelevant to what the customer needs.

Have a personal touch

There is cut-throat competition in any business nowadays. Providing a personalised touch to customers gives you an edge over the rest of your competition. A customer is any day more likely to buy an upselling product from an employee who is well aware of their purchase history or knows their personal preferences. In our daily lives also, we see that we usually have the same grocery store, plumber, carpenter or electrician. We might know someone who offers a cheaper service but we still prefer the same people because of the prior well-established trust.

Create a sense of urgency

As humans, we do always have a fear of missing out. A customer is more likely to buy a product that you are upselling when he knows that it is available for a limited time or in limited quantities. This attracts the customer to that product even more than he usually would be.

Offer Free Shipping

How many times have you scrolled a shopping website to add more products just to avoid those shipping charges? Most people have been guilty of doing that. As a business, this works great in your favour. If the product you are upselling offers free shipping, the customer would feel more compelled to purchase it. If a packet of Maggie costs additional shipping along with it, offer them a bundle of 4 or maybe 6 with free shipping. In such cases, a customer is likely to buy the bundle as free shipping seems a cost-effective option.

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If you are not moving closer to what you want in sales (or in life), you probably aren’t doing enough asking

- Jack Canfield

Use the rule of three to your advantage

In marketing and sales, the rule of three is a well-known technique. It has been observed that when a customer is offered three types of the same product for example at McDonald’s you get the small, medium, and large fries. Most customers will end up choosing the middle option like the medium fries as they would feel it offers the most value for money.

Offer rewards that induce the purchase

A customer is more likely to consider an upgraded product if there are rewards associated with it. Offering rewards on the premium versions of products will compel customers to buy it. Give rewards like cashbacks, exchange, discount, or even a coupon for future purchases. These rewards attract customer’s attention and increase the chances of them buying the product that you are upselling.

Create a membership programme

Membership and loyalty programmes are a powerful marketing strategy. It increases customer’s loyalty and overall customer retention. You can upsell through these membership programmes by offering a gift or a huge discount for members only on the premier products. Various websites offer bonuses on signing up, compelling a customer to purchase more from them.

Use follow-up Emails

Email marketing is a subtle way of selling your products out there. It also has a huge reach. You can send emails to your customers about the product that you are upselling. Add an incentive like a discount increasing the chances of purchase even further. Follow-up emails also help in notifying the customers that the product you are upselling is on-sale or only a few are left in stock. Emails act as a reminder that increases the chances of purchase.

Offer product comparisons that trigger sales

The customers are a well-informed community. Most of them will conduct their research and do comparisons before settling on a product. You can use this product comparison tendency for upselling. Show why buying the better version is worth it by highlighting the better features available.

Upselling is a great opportunity to experiment with your current customers. If done correctly, it will also increase the customer experience along with boosting sales. It is a skill to master just like several other sales strategies and processes out there. Read our article on ‘B2C sales process’ to find further insights on selling.

The post How to Sell Better: The Art of Upselling appeared first on Dutch Uncles.

Expand Your Sales With Cross-Selling

Tanisha Achrekar — Mon, 21 Dec 2020 11:13:08 +0000

Whenever you go to a fast-food joint like McDonald’s you always have that extra side of fries and coke with whatever you order. These add-ons that compliment your burger so well are a part of the cross-selling sales strategy. You are being sold add-on products all the time without even realising it. Many people cannot have pizza without a coke. The add-on coke has become so ingrained in the consumer’s head that it is no longer optional. This is a cross-selling achievement.

What is cross-selling?

Cross-selling in simple terms offers a complimentary add-on product to the existing product or service that the customer is purchasing. The buyer here is already interested in buying one of your products. You need to ensure that the add-on product you choose blends well with the existing purchase. Choosing the right product to cross-sell is an art to master.

These complementary products should be such that they meet your customer’s needs. When a customer is buying a phone, products to cross-sell would be a cover and a scratch card. If a consumer is consulting you regarding web designing, content creation and graphic designing would be the perfect add-ons worth offering, as he would need them too. In this way you are offering him an entire website development package.

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Treat your salesperson like you would treat your most important customer, because he is!

- Colleen Stanley

Cross-selling strategies to increase your sales

Just like everything else in the world of marketing and sales, even cross-selling has advanced and evolved over the years. There are several strategies to cross-sell your products. Some are obvious ones. Others, function on a subliminal level.

Offering related products

One of the most evident forms of cross-selling is offering related products/services to customers. This strategy triggers a consumer’s brain to think, “I’m buying this already, and I need that as well.” If your customer is buying tracks for jogging, the related products to offer would be shoes or t-shirts.

Offering discounts and sales on bundles

Selling in bundles is a great way of cross-selling. Do you know when you head out to buy a shirt but are offered a great discount if you buy in a bundle of three? You reassure yourself that this is better than buying one. You convince yourself that buying three offers more value for money than a single shirt. This is an excellent cross-selling strategy to sell more.

Taking an account of the past purchases

The past purchases of your customer are a great and easy way of determining what his or her future purchase will look like. Accounting the past purchase history of the consumer, their interests, and their spending habits will reflect what they are like to buy. These products are the ones you should focus on cross-selling. Amazon offers great add-ons and similar listing, excelling their cross-selling strategy.

Use loyalty programs

Customer loyalty goes a long way. Loyalty programs offer benefits to the customers that always compel them to keep coming back. Clothing brands like H&M have membership programs which give consumers a sense of belonging. If a consumer feels associated and connected with a brand, they are likely to buy more of their add-on products.

Free shipping

Online shoppers are no strangers to the minimum order value to get free shipping. If a customer is buying products worth Rs 800 and free shipping is for cart value above Rs 1200, he or she is likely to make an additional purchase of Rs 400. Most customers prefer making additional purchases to avoid shipping charges.

Offer maintenance services

This cross-selling strategy is usually used in industries where the product/service requires maintenance like cars, smartphones, refrigerators. Nowadays manufacturers offer discounted maintenance during the time of purchase. This ensures that the customer is coming back to them instead of looking for other cheap maintenance options.

Get the whole package

Offering complete packages and hampers is a great cross-selling strategy. It makes the consumer feel that they are getting it all in the same place cost-effectively. This strategy is popularly used in the event management industry where if you book a banquet, you are usually offered catering and decoration services along. Even tourist websites offer great packages where one can book from travelling to hotels to all the sightseeing in between.

Cross-selling tips for all businesses

Cross-selling is a skill to harness. There are several ways to go about implementing the cross-selling strategies in your business. To know better how to implement the above strategies, below are some tips that might be useful-

Know thy customers

When you are cross-selling, you are offering an add-on to the existing product your customer is purchasing. You will be able to do that successfully only when you are well-aware of your customers’ needs and wants. If you don’t have knowledge about what your customer wants, you might miss a great selling opportunity. Conducting research about your customers, asking them about their preferences and asking questions related to their lifestyle will help you to cross-sell better.

Staying updated

We live in a world where things are constantly changing and trending. You need to be well-aware of what is trending and what the majority are leaning towards buying, to create your optimum list of products to cross-selling. Do market research and observe the patterns of the trend to be on your ‘A’ game while selling.

This also means adopting a more customer-centric approach instead of a product-centric one. Earlier, along with smartphones, earphones were a complementary purchase. However, these days people are cross-sold Bluetooth earphones, smartwatches, and AirPods. The only way to succeed in any business is to keep adapting to new technology.

Train your sales staff in cross-selling

Your employees will be the face of your company when they are making sales and bringing in customers. Training them on how to cross-sell effectively will set them in the right direction. Make them understand that cross-selling is not about misleading the customers or being too pushy to sell more. Instead, it is about creating optimum customer satisfaction.

Being proactive

To sell a product, you need to actively pitch-in to attract your customer’s attention. Being alert and an active listener is a way to go about it. Paying attention to your customer will help you to understand them better. Carefully listening and paying attention will increase customer’s satisfaction. Proactively listening will help you understand a customer’s need and know what products to cross-sell.

Use emails for cross-selling

Email has become one of the most powerful tools for cross-selling. Many websites cross-sell by mailing recommendations of add-on products and sale offers. E-commerce apps like Myntra, Ajio and Tata Cliq use this strategy constantly. When a person sees a limited offer in their email, they will tend to impulsively shop promptly. Emails successfully catch a customer’s attention without being too ‘in your face’.

Cross-sell is a great way to increase the sales of your business without expanding your customer base. It does require practice to know the best additional products to offer over the main purchase. Give yourself time and keep experimenting with different cross-selling strategies to find what works and what does not. Most buyers these days are able to figure out the typical sales gimmick. Ensure that you don’t hamper a customer’s trust while cross-selling. To know more about consumer behaviour, read our article on ‘customer buyer behaviour’.

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