Our blog this week looks at how your up- and cross-sell opportunities can grow with value management. Being number one and engaging customers early is always a plus when you’re in a competitive sales situation. But these days making sure that you are first in the queue, and that you have upheld your reputation for good customer relationships, is not enough to prove that your solution is best. Your customers need to be shown the value that your solution can add to their business, in dollars. It is not easy to draw the links between your product capabilities and the business needs, to show your target customers the real benefit; but value management really is the key to opening more sales opportunities.
Value management is key for upsell cross-sell
Let’s think a bit more on this. Would you pay for additional or upgraded capabilities if you were not sure how much value you would receive in exchange? Why would your customers? Would you invest in a new product or service if you didn’t know how much value–in terms of money–it would make you? Then why would your target customers?
In one of our earlier posts (5 differences to tell value selling from value management | The Value Search Team), we touched on how value selling can help grow deal size, right from the start. From the outside in. At the end of the day, when you can show your customers all the great benefits of your offering, you can offer speedier and bigger value realisations. This approach is so effective, because when customers’ value is managed your product or service will reach to other business areas so much sooner.
Value management, perhaps most significantly, can increase your openings to upsell and cross-sell within the bounds of your current customer base. When you have already shown your customers the value benefits of your solution, you will secure their long-term investments. The job here is half done already – you just need to convince your customers with the value potential that will increase your deal sizes.
Value management is a customer relationship approach
We mentioned in our earlier posts that value management is not a sales approach, it’s a customer relationship approach. Value management spans the entire customer value lifetime, end-to-end. It explores customer needs pre- and post-sales and allows you to find the spaces where your customers and target customers require your solutions. Managing value offers you huge sales advantages.
Thinking about how value management can help increase upsell and cross-sell, here’s our four tips:
1. Build customer relationships based on trust and credibility
Customers are allies. With value management you work with your customers, as partners. And with value selling you are always furthering your customers’ business success story. These days, constructing a trustworthy relationship goes a lot further than the quarter-of-a-century-old practices of traditional sales ploys. To build real trust your customers need to know that you are reliable. This means you do what you say. You are honest. From a position of real trust, any windows for cross- sell and upsell will open naturally. The best thing about operating your sales processes with value management methodology, is that upsell and cross-sell opportunities are as beneficial for your customers as they are for you. And this is where customers will feel like they are in a true partnership with you.
Some important things to ask yourselves here:
- Is your company knowledge excellent? – can your value team build a reliable business case?
- Can you deliver on your offering? – are your business ways and forecasts dependable?
- Do you make your customers feel like partners? – do your customers really know that you are on their side to help build up their business?
- Can your customers trust you to be honest with them? – keep in mind, honesty builds credibility and trust. If you start with great forecasts and then all of a sudden realise the business case is negative, honesty really is the best policy for your credibility!
Here at TVST, our upsells and cross-sells are achieved when our skilled value management people have built and presented a dependable, clear-cut business case and they can confidently discuss and defend any arguments with the target company. Sales are pretty painless when customers have our trust and when our sales reps and customers work as partners with our customers. And on the very rare occasion we are unable to deliver on an offering, we are straight up about it. No messing! We act like our customers’ partners, and we don’t tell tall tales.
2. Aim for new customers
You can every so often convince a target customer to buy a bigger, better bundle than they were planning on, but the value potential has to compensate the effort. It’s reasonably obvious that separate business units, departments, etc. will have parallel needs. Applying a value management approach means you can use the same methodology for other parts of a business to open new opportunities to upsell and cross-sell, from the outside in. This helps to shorten the sales cycle and accordingly reduces the cost of sales.
When you put the value of your offering at the centre of your sales pitch from the word go, you can expand the value benefits to additional products, without difficulty. Particularly if your extra offerings work with your opening offering!
Presales, using an “outside-in” business case to show target customers the potential value target customers can realise, you will increase your odds for upsell cross-sell. And additionally, by running business value workshop at the beginning of your customer relationship, you will boost your chances and maximise value potential. You will also trigger curiosity and inspiration in other parts of an organisation, which will open that door for more business value discussions.
3. Aim for existing customers
When you aim for upsell cross-sell with your existing customers, you are trying to convince them to upgrade, or to grow your solution to other business units where it wasn’t implemented the first time.
Your customer has by this time bought into your value and believes that your product solves their business challenges. You proved your value improvement. And, from here it’s so much easier for you to show you have more solutions to overcome some more of your customers’ challenges. Compared to starting from the beginning understanding a new customers’ needs and fitting your solutions to their needs, this is effortless. This point is backed up by the percentages. When you sell to an existing customer the success rate is between 60-70%. But this falls to 5-20% when you’re starting with a new customer.
You can pave the way to cross-sell and draw a line that is a lot harder for your competitors to beat if, for example, you can show you can double the value realisation but are only increasing the bill by 10%. Selling a related product to a different part of an organisation will not be as complicated as it was the first-time round, as now you can actually prove the value achieved. Value realisation is the final phase in the value management cycle. This is where you turn one-time deals into big long-term investments. When you satisfy your customers and show them how much money you are making them, it has a long-term effect.
4. Get competitive advantage
Over a year on from the start of Covid-19, many businesses are struggling to survive in these new and ever-changing economic climates. One thing’s for sure: digital transformation matters now more than it ever has before.
After the downfall of big retailers, such as Arcadia Group and Debenhams, the ONS reported that 15% of companies were at risk of collapse by April this year, in the UK alone. This figure is quite scary. The reverberations of Covid-19 are still being felt industry-wide. No one is getting out untouched. With all the uncertainty, many businesses need support on their digital transformation journeys and, as a result, there are huge opportunities waiting for those who can help. On the other side of this penny, the companies that have transitioned successfully to the work from home initiative, largely companies in higher productivity service industries, like ICT and finance, are excelling into the future and carrying the guiding light.
- So, how do you make sure you have competitive advantage?
- And, that you and your customers both succeed?
Act now to help customers develop competitive advantage
Well, for competitive advantage you need to be managing value with the best capabilities and tools. Your tools need to be scalable. And you really do need to act fast. (Things to think about when you target the mid-market with value selling | The Value Search Team) You can outsource your business value management, if this doesn’t sound workable.
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Do you think that $1 million value added would make a difference to a customer’s business?
- And if so, would it make a difference to their investment plan? – Of course, it would!
The current situation is offering the opportunity to challenge your customers. Will they move forward? Or will they delay their roll-out? –potentially hitting pause on their value realisation, which could lose them the race against their peers. Software, hardware and telco vendors need to guide the way. Today is when to show your customers why your solutions are the best option for survival.
Conclusions
To sum up, the bottom line is that your sales team really have to get to know your customers’ needs and challenges well. Then, your customers will more than happily be convinced to use your solution in other areas. They will absolutely invest in a new solution that adds more value to their business. Trust and honesty will get you the sales results. This is because customers want value measures and to know how much value you will bring their business. They need to know the value improvement. It becomes so much easier to grow your sales opportunities when customers know that you know all about the challenges they are facing, and you have already improved their value.
With a value management approach, you can bank on it that you will get more cross-sell and upsell openings. And the more products and services that your customers buy from your organisation, the more likely they are to stick around.
The last question here is: When is the right time to mention you have more solutions?
Well, the right time to upsell cross-sell is really when a customer has a real need for another product or service you offer. When you can do value management the right way, you will naturally predict your customers and target customers’ needs. You will be thought of as a partner. You are completely dependable.
With “value” always at the heart of our sales processes and our customer relationships, our customers always know we want to enhance their quality, their ventures and their initiatives.
At The Value Search Team we build, operate and scale your value management practices; anytime, anywhere. Can we help you? In this fast-paced era of digital transformation, a business value approach isn’t effortless but, in this time of great change and beyond, it will be the key to your success. If you need any advice or support, or if you have any questions or comments based on the topics we discuss in our blogs, we are here and we always love to hear from people. Please ‘get in touch’ and a specialist member of our team will get back to you.
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