Rethink Commerce Blog

Best Strategies For Upgrading Your SaaS Users

Posted on June 18th, 2015 by

Generating revenue from new customers is a critical part of every SaaS business’ marketing strategy. But in the push to build up the business through new acquisitions, many SaaS companies neglect the revenue moments provided by existing customers. These moments exist at every stage of the digital commerce lifecycle – from acquisition and activation to upgrade and renewal. And for most SaaS businesses, these revenue moments presented by existing customers–whether it be an upgrade or renewal–are the most important for long-term profitability and success.

Taking advantage of these opportunities means providing the customer with the appropriate experience or service for each moment. As the SaaS model continues to gain traction, businesses will be required to adjust their offerings to meet the varying experience and sophistication level of their customers. As a result, an entry-level offering, designed to appeal to a larger audience, may unintentionally inhibit deeper engagement by more sophisticated users.

Converting a trial or entry-level user to a paying or premium subscriber is the hard work of building and sustaining a profitable SaaS business.

What you do to engage your customers at the key revenue moments will determine, for example, whether or not you successfully upgrade them to the next product level and, more importantly, how valuable they will be to you over their lifecycle.

Upgrading customers to the next service level is one of the most effective ways to deepen the customer relationship and increase customer lifetime value. Here are some tips to help you get started.  

1. When designing your product offerings, be sure to align the pricing with the value provided. Carefully choose bundling options that make it easy for the customer to understand and appreciate how the additional options will benefit their operations. By reinforcing the provided value, you’re more likely prompt additional upgrades.

2. Keep a close eye on customer growth. Most likely, your initial contact with a potential customer involves trying to find out as much as possible about that customer’s organization and its particular needs. This same strategy holds true for upgrading your clients. Don’t neglect the importance of learning about how your current client’s growth plans and progress could align with your product offerings. When this alignment is done correctly, the upgrade process becomes much more organic and your clients will seek out upgrades of their own accord. Your customers will feel that you are in tune with their growing needs and that you are taking proactive steps to meet those needs.

3. Understand how your clients use your product and personalize their experience with it. Use analytical tools to compare customer profiles and usage patterns with product upgrades that add value. This will help you create an ongoing dialog with your clients. Personalizing your marketing efforts is a better option than using a scattergun approach that covers your entire client base. Customers want to feel that their situation is unique and that you are responsive to that situation. This increased sense of worth encourages your clients to turn to your solutions quickly when confronted with a new need or challenge.

4. Enable self-service for clients. Make it easy for your clients to purchase your product upgrades. A well-crafted self-service option allows your clients to see their current subscription status and usage, a simple cost breakdown of purchasing new capabilities, feedback from other clients who are already using the upgrade successfully, and a way to try out the upgrades before purchase. Obviously, it must include a streamlined way to purchase the upgrade. Not to be forgotten is including a way for clients to receive any help needed to get their upgrade up and running smoothly and optimally, as well.

5. Do not rely entirely on self-service options. Zero in on value gaps that can be closed by an upgrade product. And once you have identified it, sell it proactively. Encourage your sales staff to aggressively respond to client need. When your client’s growth does not justify a new product, adjust your sales approach to feature service value. That way, when your client is in need of an upgrade, you’ll be the first one they call or click. Realizing that your growth depends on client satisfaction just as much as it does on initial subscription sales will re-focus your marketing strategies towards customer retention through intelligent upgrade offerings.

Avangate powers modern Digital Commerce, solving the complexity of online commerce, subscription billing, and global payments for Software, SaaS and Online Services companies. Backed by a proven cloud platform, unmatched expertise and a depth of digital commerce services, Avangate helps digital business leaders drive the fastest path to revenue, maximize the value of every customer, and expand global reach. Contact us for more information about how our digital commerce services can help you grow your business.

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Raj Badarinath

VP, WW Product Marketing and Alliances

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