How to upsell to customers by introducing new product features
When it comes to SaaS platforms and cloud-based applications, there are a few different methods of generating revenue. Most however, rely on loyal customers who pay yearly or monthly fees in exchange for use of the product and service.
When we look at more complex business solutions, though, pricing can become more complicated, and fees may be based on number of users, usage ratings, or access to features. The latter presents an enormous opportunity for business growth, and capturing coveted recurring revenue.
In this way, when product managers can align with business goals, the product development roadmap and new feature introduction can play a big role in creating new opportunities for sales, and furthering relationships with existing customers.
Introducing new product features is good for everyone
In the software development/SaaS business there are a couple things we're pretty sure about: On the business side, SaaS subscription models rely on customer loyalty and recurring revenue. On the product side, developers want to continually improve software in ways that people actually like and use.
When we combine these ideals, we can see how we can leverage them to improve customer experiences and increase sales. Let’s break it down:
New product features improve customer experience
While some apps specialize in providing a very basic service or essentially only doing one thing, B2B SaaS solutions don’t get away with the bare minimum. It’s a double edged sword:
It can be easier to establish long-term loyalty and stronger customer relationships, but you have to be continuously striving to make improvements and create better experiences.
Luckily, most of the time new product feature development occurs in direct response to what customers want and need. Through better usage data and customer insights, you often can see just how people are using your products, and what they may need in the future.
Aside from this, new product features just make customers happier.
When you can introduce new functions or capabilities to your existing users, it can produce a sense of value - that they have invested wisely - and trust - that you have their best interests in mind, and care to delight them.
These sentiments contribute to strengthening customer relationships, as well as improve the overall experiences that your product and company provides.
Customer experience is no longer just about support and service. All parts of a company, including sales and product teams, need to consider how to steadily win over new prospects, and continue to satisfy existing customers.
Developers want to continually improve software
Which brings us to the next point. Product managers and developers want to make usable and enjoyable software. You may find that the challenge of addressing customer wants and needs is exciting, and you feel you are successful when you introduce new products and features that people respond positively to.
The continuous strive for improvement is simultaneously good for employee morale, and good for customer satisfaction. One downside is that when feature development is time consuming and not always within your realm of expertise, it can prevent a few challenges for acting quickly enough and keeping up with consumer trends and customer demands.
New features present opportunities for sales growth
Now comes the important part. New features and product capabilities are not just good for customer experience and development, they present new opportunities for upselling to existing customers and attracting new prospects who may not have been an potential prospect before.
While customers want to continue to feel they get a good value from your platform, they should be willing to pay for more access (and if not, then they're likely not as good a customer as you think). When introducing new features, it is an easy way to capture more revenue from existing customers, without needing to go through an entirely new sales process from start to finish.
In fact, it's become understood across industries that a greater percentage of a company's overall future revenue will come from existing customers, not new sales.
The ROI for this target group is much larger, and upselling reduces cost per acquisition rates, as well as improves customer lifetime values - indicators necessary for financial forecasting.
When it comes to SaaS businesses, we're seeing how the lines between internal processes and teams are becoming blurry. Just as the lines between sales and marketing are far less distinct these days, the lines between product development, business, and customer service are not so clear cut.
We're all in the game to make great products that people use, love, and are willing to pay (a lot) for. When the end goals are the same, it can actually become easier to create a product development roadmap.
Introducing new product features is one of the best ways to not only encourage repeat business, but get your existing customers to buy more. When you are providing great services, and developing your product in a way that is responding to what people want and need, you can easily upsell. Your customers win, and so does your bottom line.