How TaskUs Achieved 30% Growth in Upsell Revenue & 20% Growth in Cross-sell Revenue
In this case study, we observe the key role of DemandFarm’s digital key account management software in increasing the upselling & cross-selling revenue of TaskUs. The case study covers Taskus’ journey of identifying the top key account management challenges to streamlining key account planning processes and finally registering revenue growth in its key accounts. Read the Entire Case Study by clicking here Watch More: Leaders of TaskUs sharing about their Digital Account Management journey with DemandFarm
Guide: Cross-selling and Upselling Explained
Successful strategies for satisfying the additional needs of customers beyond the primary product and increasing the quantity of the purchase decision. Learn more about how to cross-sell and up-sell in key accounts by understanding customer needs and goals, finding whitespace opportunities, making customized recommendations, and finding the right-person to reach out to deliver the right-message at the right-time. This cheat sheet contains quick tips and strategies on how to successfully cross-sell and up-sell in Key Accounts through focussed conversions, automation, incentives, retargeting, and demos.
Cross-Selling vs Upselling – The Main Differences
Recall the last time that you were at McDonald’s (even though it feels like a decade at this point). What did you order? Maybe you only wanted some fries and coke, but the cashier convinced you to convert them into a happy meal. Or perhaps you noticed a new addition to the burger suite (at a point when you were hungry enough to devour a buffalo) and decided to try it out instead. If we start inspecting such encounters closely, an interesting pattern emerges. For instance, walking into a shoe store and subtly pitched to add a pair of socks or shorts to the cart. What is this? And more importantly, why does it work so well for almost all organizations, regardless of industry? Guide: Cross-selling and Up-selling Explained What is Cross-Selling? At its worst, Cross-selling is an advanced sales tactic. But at its best, it is a customer success story that corporate leaders yearn for. As we have seen in the examples above, Cross-selling is the process of satisfying the customers’ additional needs that the primary product cannot fulfil. In other words, it means encouraging customers to buy complementary products with their purchases, increasing the overall cart value. This places the strategy miles away from cold reach-outs and sales prospecting simply because it taps existing customers instead of new ones. What is Upselling? Up-selling is the first conceptual sibling of Cross-selling, where the end goal is to increase the cart value not by introducing new items but by increasing the size or quantity of the initial purchase decision. For marketers (or salespeople), this may translate into selling a higher-end subscription to the customer with more advanced features or integrations. In most cases, upselling works much better than Cross-selling since it is easier to improve the commitment of a purchase decision that the customer has already made! What is the difference between Cross-selling and Upselling? More often than not, Cross-selling and Up-selling are used interchangeably, marking a conceptual error. The best way forward is to consider Cross-selling a complementary product and Up-selling an upgrade. For instance, upgrading an economy aeroplane ticket to business class would be an Upsell. But shopping from the in-flight product catalogue, such as headphones, would be a Cross-sell (since you have already bought the plane ticket). Upselling is almost always associated with a higher-margin product. Cross-selling deals with similarly priced complementary products with no significant enhancement in the margin. Thus, margin expansion is a function of upselling. Cross-selling helps boost order value and volume. The following examples will make the difference vivid. Case Study: TaskUs registered a 30% increase in up-selling & 20% increase in cross-selling Why are Upselling and cross-selling Important? When Brian Halligan, CEO of HubSpot, went onstage to deliver a keynote at Inbound 18, no one expected what was coming next. He officially shattered the traditional concept of Sales Funnels – a cornerstone of marketing strategies since 1898. His argument? Funnels are inherently outcome-centric. They do not care about the customers once the sales process is over. The solution? Delighting customers with the new Flywheel model instead. As HubSpot explains, companies can drive more referrals and repeat sales by using the momentum of happy customers. This is a strong indication of the direction in which the digital world is headed. With increasing transparency and customer awareness, businesses today have no choice but to invest their energy into delighting existing customers. Why? This is because, in present hyper-competitive landscapes, acquiring a new customer is 5 to 25 times more expensive than retaining an existing customer, as reported by Harvard Business Review. In other words, upselling and Cross-selling are much better business strategies than Sales and Customer Acquisition. Here’s why you should be paying close attention: 1. Revenue Growth Both Upselling and Cross-selling have a direct positive impact on your average order value. This is a rather obvious outcome when customers are motivated to opt for higher-priced alternatives or add-ons. To put the numerous benefits in perspective, here’s what Neil Patel explains happened in 2006 when Amazon added Up-selling capabilities with the phrase – “customers who bought this item also bought”. They clocked a 35% boost in sales! Source 2. Strong Customer Relationships The fact that customers are willing to buy is itself a testimony to existing solid relationships. Successful cross-selling and up-selling can strengthen this relationship to the point of co-dependence, provided that you can deliver on your promise. But this also comes with a word of caution – never try to pitch additional products/services that buyers do not need. And even when you do get the pitch right, always be willing to take no for an answer. 3. Increased CLV For certain businesses, such as in the SaaS space, upselling and Cross-selling can amount to as much as 70-95% of the revenue. This means that in a modest scenario, initial sales can rake in only 5% of the revenue! This brings us to another critical revelation – the effect on Customer Lifetime Value (CLV). With most of the revenue being a direct result of the day-to-day experience of customers with the business’s products/services, Up-selling and Cross-selling also have a direct bearing on the overall CLV. How to Cross-sell and Up-sell in Key Accounts? Cross-selling v upselling is an art form where customer success teams need to target the sweet spot between under-delivering and under-pitching, and Account Planning plays a significant role in making this possible. Here are some of the best practices that will help you paint the canvas with more conversions: 1. Understand Customer Needs and Goals Even though it may look tempting, don’t just bombard your customers with product suggestions. The right Upsell/Cross-sell opportunities are hard to come by, leaving no room for squandering. The best way forward is to prospect customers first and answer questions like: What were they looking for in the first place? What are their short-term and long-term goals? Is there any budget or operational constraints? And more… Once you know everything about them, proceed to take the right call – Upsell or Cross-sell?