Hey, 👋 Scott from The Sales Mastermind here.

Today’s edition only takes 3 minutes.

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Financial returns are inversely correlated with the sexiness of the opportunity. When something is attractive, sexy, exciting, and popular, the amount of money to each individual decreases.

The same is true in business. Selling to new customers always feels more exciting. And many founders forget their current customers.

Today, we'll cover:

• 13% Annual Growth
• Upselling vs net new
• An action plan anyone can follow
• Bonus: Reselling

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13% Annual Growth

A SaaS company I worked with charged for one primary value metric, the number of users, internally called "Seats."

Customers were supposed to pay more if they added more than their allocated Seats. But it wasn't automated.

Anytime a customer added extra Seats, the team contacted the customer, got approval to increase billing, and manually changed their next bill.

At least they were supposed to. As you can imagine, this was rarely done.

Many customers were well above their limits.

During a management meeting, the CTO discussed how much he hated spending time updating billing.

So we decided to automate Seat upgrades. When someone tried to add another Seat they could either remove an existing user or pay extra.

No one expected much revenue, but it would remove the manual headache for the team.

Fast forward two months and we'd seen 13% revenue growth from just upsells.

The moral is to stop sleeping on upsells.

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New revenue is Simpler

Many founders focus on new customers because it's easy to track.

It's certainly true the tracking is easier. But it's the most expensive revenue you can work on.

It requires expensive teams to slowly build trust with buyers who don't know you and need a strong reason to change the status quo.

And you lose far more new deals than you win. According to Invesp CEO Khalid Saleh:

A good rule of thumb is to fix your reporting, ideally using cohort analysis as a percentage of initial spend.

Then, dedicate up to 30% of your sales time to working with existing customers to find upselling opportunities.

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Steps you can take:

Upsells are quick revenue.

The caveat: Upsells are only so scalable, as many customers don't need or want more from you. I'd rarely recommend focusing more than 30% on Upsells.

Upsell List

Usually suitable for an extra 10-20% in revenue

• Create a list of every active customer
• Pick one of your products to focus on (or an additional pain point if you only have one product)
• Stack rank the list by who will be most receptive to this product/pain point
• Start at the top of the list, calling and emailing to book check-in meetings
• Pitch the new product/pain

Upselling is simple but not easy.

Long-term upselling is a specialised skill, and you'll have dedicated sales reps. In the short term, don't underestimate the potential of working out what more you can sell to your customers.

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BONUS: Reselling

Expect to resell 5-10% of previous customers over two sales cycles.

• Create a list of every inactive customer from the last two years
• Pick one of your products to focus on (or one pain point if you only have one product)
• Stack rank the list by who will be most receptive to this product
• Start calling and emailing from the top of the list to book a few sales meetings with former customers
• To book the meeting, focus on everything new since you spoke to them
• During the sales call, treat it like any other discovery and focus on the pain

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Until next week,
Scott Cowley

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