When tracking SaaS growth metrics, businesses often focus on recurring revenue. Enrolling new leads in subscription services is a great way to maintain a steady flow of income and boost cash flow. Yet at the same time it’s important not to forget the importance of broadening offerings for existing customers. Cross selling offers a simple way to introduce customers to complementary products, improving SaaS growth and customer satisfaction with targeted actions.
What is cross selling?
Cross selling is a type of marketing strategy used to sell complementary or related services to a business’s existing client base. For example, a bank might sell related insurance products to clients with open business accounts. For digital SaaS companies, cross selling examples include things like product training or premium customer support as add-ons to their software. Integrated software products and apps offer additional ways to cross-promote and sell related, non-core products to your customers.
Cross sell vs upsell: what’s the difference?
While upselling and cross selling are closely related, there are some key differences to be aware of.
Cross selling is a strategy to sell complementary products alongside the primary purchase
Upselling is a strategy to sell an updated or more feature-rich version of the original purchase
When upselling, the new and improved version of the original product also tends to be more expensive. By contrast, cross selling keeps the original plan in place. Instead of upgrading to a more costly version, the transactional value is increased with the addition of related products or services. Both marketing techniques have their place. If the customer is ready for a service upgrade, they may be more receptive to upselling. On the other hand, cross selling works better for new customers or those who aren’t ready yet for a full upgrade but still want something new.
Cross selling as part of a SaaS growth strategy
While there’s a time and a place for both upselling and cross selling, cross selling offers distinct advantages when it comes to SaaS growth. It inspires innovation, ensuring that SaaS companies find new and inspiring ways to keep their customers hooked.
Here are three ways to incorporate this strategy into your sales and marketing plan.
1. Identify and consolidate complementary services.
Look at your current software products and find services that naturally fit together. This could include bundling related software together, adding insurance to financial products, or adding a customer support plan onto subscription packages.
2. Use data to better understand customer needs.
Buying behaviour plays a key role in any SaaS growth metrics, so use customer data to group your client base into segments. You will be better able to understand how your users are interacting not only with your website, but your products and services. This is a great jumping-off point for creating new, useful add-ons to existing service plans.
3. Track and analyse cross sell metrics
In addition to keeping an eye on customer data to drive innovation and SaaS growth, you should also look at specific cross sell metrics. One example is renewal rate, which shows you which services your customers are using and deriving value from. If some add-on services aren’t being renewed at the same rate as others, you can drop them from your strategy.
Tips for maximising SaaS growth
Cross selling offers plentiful benefits to SaaS businesses.
It makes your business stand out from the competition with more comprehensive solutions.
It keeps existing customers engaged by improving their service, for lower churn rates.
It allows your business to solve a wider range of problems by offering inter-related solutions.
One final factor to keep in mind is that you want to avoid bombarding customers with unfamiliar, unwanted products. Cross selling is most effective when it’s highly targeted. In addition to tracking cross sell metrics carefully, you should also keep a close eye on subscriber demographics, preferences, and behaviour patterns. This helps ensure that your cross selling suggestions will be both timely and relevant to your customers – boosting SaaS growth overall.
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