Renewals and Upsells. How to Build Your Existing Business Sales Motion.
This newsletter hits home. Why?
Because I spent four incredible years managing and upselling existing customers.
It was my job, day in, day out.
I'm not sure you know this, but while at LinkedIn, I focused on renewing existing customers and upselling them.
I managed customers in Italy, the UK, and all over Europe.
From small SMBs with few seats of LinkedIn Sales Navigator to large banks or enterprises.
For that job, I had two main goals:
Renewing existing customers (avoiding churn in between)
Upselling existing customers
My goal was the total amount of the yearly renewal plus 15-20%, which was supposed to come from the upselling.
In today's world, managing your existing customers effectively is crucial. Whether you have 5 or 500, you need an existing business motion.
Too often in the past, the focus was acquiring new customers and doing it right and fast. But then, the lack of structure on the other side of the business resulted in a very high churn rate.
All that effort - both financial and time - went wasted.
One of the best models I have seen that explains the virtuosity of such a motion is the Bowtie by Winning by Design.
Winning by design operating model
As you can see, according to this model, new business and existing business are equally important.
You acquire a logo, and then you focus on the right part of the bowtie:
onboarding
adoption
expansion
Now that we have clarified why your existing business is essential, let's build it.
First and foremost, if you don't track it, it doesn't exist.
You need one pipeline within your CRM.
Hubspot Existing Business Pipeline Setup
Track each stage and assign goals based on renewal, adoption and churn reduction.
Bonus point: if you spend more than 20% of your total time onboarding, renewing and upselling existing customers, it may be time to hire your founding Customer Success Team.
Onboarding
Having a solid onboarding is critical. Usually, onboarding starts with specific KPIs you want to hit, for example:
onboarding time in X days
onboarding milestones to be hit by X days
Start the onboarding phase when you sign your customer or even before.
If you have a final call before the signature, make sure to have the person who takes care of the customer afterwards. (account manager, customer success) get introduced to the buyer/decision maker to establish a good relationship.
Adoption & Renewal
After onboarding your customers, it's time to push adoption.
There are multiple ways, but one of those I like the most is MBR (Monthly Business Review) or QBR (Quarterly Business Review).
These are essential meetings where you and the customer (hopefully the decision maker) go through:
Product Adoption
Product Feedback
Expansion Opportunities
The goal here is achieving impact.
Your solution, product or service to create a tangible impact for your prospect's business.
Renewal needs a separate discussion.
Hit the renewal conversation at least 90 days before the actual renewal date.
Don't delay and wake up one day with one churned account.
Expansion
Now, the juicy part. Each customer you have, from the smallest to the biggest, has expansion opportunities. You should go after them.
Disclaimer: expansion is strongly related to adoption and renewal. If you have unhappy customers, then you can skip this part. There is no expansion without impact.
How do you upsell or expand your existing customers?
Well, it depends on your product, but assuming you have a B2B SAAS product, usually, you can:
Increase the footprint within the same account by acquiring new seats, licenses, or accounts.
Sell to sister companies within the same group.
Expand to other countries.
Cross-sell your product.
Summary
The goal of each business is to increase LTV (lifetime value), and the goal of every excellent business is to make it 3X your CAC (cost customer acquisition).
Winning deals is not enough; you need to win and expand deals.
That is why it's crucial to start building your existing business sales motion.
But remember: you need to create impact.
Thanks for reading this far. I will see you next week.
