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TSIA Expand Selling research provides clear guidance on how to utilize Services and Customer Success teams in the Sales process for cost-effective revenue growth from existing customers. The name “expand selling” is derived from the third stage in TSIA’s Land, Adopt, Expand, Renew (“LAER”) customer engagement model. It is rooted in TSIA’s belief that selling can be the natural, helpful outcome of a Services conversation, as long as it is taken within the mindset of helping the customer solve their problem, achieve their goals, and drive value from their technology investment.
The first thing to remember when involving Services in the Sales process is that, perhaps counter-intuitively, no one is trying to turn them into salespeople. While they can be involved in discovering and driving upsell and cross-sell opportunities, their primary job is (and always will be) to help the customer and resolve their problems. But in the course of doing so, they may discover and aid in new sales opportunities. TSIA Expand Selling research and advisory provides the playbook to safely turn these interactions into revenue.
As any Sales leader will tell you, selling is a numbers game. The concept of “touchpoint calculus” affirms that your company’s Services teams interact with your customers 5-15x as often as their Sales counterparts. To grow revenue from existing customers effectively, these interactions can’t be left on the table. While involving Services is important to growing enterprise accounts, it may be even more critical with your SMB market segment, where hiring adequate Sales coverage to properly cover the breadth of these accounts is cost-prohibitive. Services teams have to be able to take Sales motions in order to make cost-efficient growth happen.
That said, Services professionals, by-and-large, are seen as “trusted advisors,” and customers will relate to them the problems, challenges, and initiatives that they won’t ever divulge to a Sales rep. This relationship equity, while powerful, has to be spent wisely. It can lead to tremendous insight, but with the potential reward comes risk.
This is why the prime directive of expand selling comes from TSIA’s CEO J.B. Wood, as he stated in his 2009 book, Complexity Avalanche, “Helping will sell, selling won’t help.” Any sales activity taken on by Services teams must be done strictly within the context of helping the customer solve their business problem or drive additional value from their technology investment. With that core mission in mind, Services teams can not only generate additional leads and revenue, but also improve customer outcomes.
TSIA has identified four key motions that Services delivery teams can take to help drive revenue from existing customers. Moving from left to right, the activities undertaken by the Services teams become more complex and intentional, and take the customer deeper into the Sales cycle, even to the point of closing the deal themselves.
(Click image to enlarge.)
The 4 stages of selling through Services.
The 4 stages of selling through Services.
As we start on the left side of this chart, Gather and Leverage Account Intelligence, Services teams don’t have to make many changes to what they’re already doing to provide useful information. They have a treasure trove of data that can be utilized by Sales and Marketing. However in many cases, these outside groups aren’t even aware of the account data that Services possesses. Even if they are aware, this data requires translation to be useful. Services has a different language and lexicon than Sales, and the data needs to be packaged correctly in order to be impactful.
Services teams are constantly being asked to “chip in” throughout the various stages of the Sales cycle, especially with upsells and cross-sells to existing customers. They are involved in pricing and scoping of projects, assisting in quoting and placing orders, and in reinforcing the value that customers are receiving from their company’s offerings. Recently, TSIA has seen even more creative ways to involve Services, including educating customers on using features they already have (“uptelling”) or even helping to capture and communicate the value that customers are receiving from their investment in your technology (“value selling”).
There isn’t a more cost-effective source of B2B leads than your Services Delivery and Customer Success teams. The leads they take generally cost between $7 and $25 (Marketing-generated leads cost 10x as much) and close between 20 and 25% of the time. They are taken in the course of their normal Services-related duties, meaning the leads are directly related to a customer problem that needs solving. However, you need the proper systems, processes, training and compensation to make it all work well. TSIA provides the benchmarking and proven best practices that allow you to not only uncover new opportunities, but also provide better outcomes for customers.
TSIA has found that Services teams can be charged effectively with closing actual upsells and cross-sells, under carefully-orchestrated conditions. They cannot fill the role of the account executive, executing complicated sales with negotiated terms and multiple-stakeholder alignment. They may, however (depending on their level of capability), be able to drive upsells, which TSIA defines as adding incremental value to an existing agreement. The types of sales they execute should be in line with TSIA’s STAR Protocol:
When these conditions are met, TSIA research has shown that Average Revenue Per Account (ARPA) can grow significantly.
Expand selling motions are most effective when they aren’t taken by Services teams alone. They deeply benefit from the cooperation of Sales and Sales Operations, and thrive more effectively if Marketing is involved as well. Getting all of these teams on the same page with a well-articulated, efficient and effective engagement model for existing customers is critical for cost-effective revenue growth.
From startups to the Fortune 100, technology companies are learning more about how TSIA is helping companies leverage Services touchpoints to increase revenue from existing customers. We’d be delighted to have a conversation with you around your company’s unique challenges and how the research can help you achieve cost-effective growth, so please contact us to learn more.
In the meantime, these free resources can also help you get a better understanding of expand selling and the value it can bring to your organization:
Post Date: April 12, 2018
Steve Frost is the vice president and managing director of revenue research and advisory for TSIA. He also serves TSIA’s vice president of expand selling and subscription sales research. Throughout his career, he has held various leadership and business development roles at companies like Google, Netscape, and Loudcloud, helping them define their go-to-market strategy and business development tactics. Steve is dedicated to helping technology organizations grow their services, subscription, and XaaS revenue by optimizing their practices for growth throughout the customer lifecycle.
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The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.