MSP Sales & Marketing Quick Guides: Upsells and Cross-Sells
Upselling is the act of offering customers a higher value package or product, or more services, at the time they buy into your company. Cross-selling offers existing customers new packages, products, or services based on their current sales. Both techniques are relatively easy to implement as an MSP marketing strategy to increase monthly recurring revenue (MRR) and profitability. As you’ll see throughout this post, statistics show that upselling and cross-selling can be pretty effective.
In this quick guide:
- Discover the win-win-win results of bundling data protection services as a built-in upsell.
- Understand the value of quarterly business reviews (QBRs) for MSP growth through cross-selling.
- Get four ways to maximize upsell and cross-sell opportunities during initial customer meetings and QBRs.
You’re Not Selling; You’re Protecting.
In today’s cybersecurity landscape, MSPs are up against sophisticated, calculated, and frequent attacks on both their SMB clients and their MSP. Despite these realities, well-intentioned MSPs wanting to satisfy the budgets of all potential clients present some security measures as optional. Sure, tiered features can attract budget-conscious clients and introduce opportunities for upselling, but they also allow clients to forgo business-critical protections.
Clients operating without comprehensive business continuity and disaster recovery (BCDR) solutions are jeopardizing their business, end-users, and MSP. Growing state regulations and the court of public opinion hold service providers responsible for data breaches. As an authority on cybersecurity resilience, it’s an MSP’s job to provide the appropriate layered security approach required for withstanding today’s attacks. When an MSP’s client suffers a data loss incident, service providers face more than just recovery. Fines and penalties are one thing, but a public record of a breach under your watch is another. Avoid damage to your reputation and ability to compete in the market with a security-first approach to all client interactions – even in sales and marketing.
The Win-Win-Win Strategy of Built-In Upselling
Bundling the protections your clients need is an efficient MSP marketing tactic to seal the deal. It will be a no-brainer for clients who understand the seriousness of data loss. Education is essential for clients with budget concerns or people who may think you’re just trying to make more money. Many MSPs refuse to take on clients unwilling to accept their standard package of data protection services. Others may allow clients to pick and choose but require those clients to sign an acknowledgment of the education you’ve provided and a waiver of liability in the event of a data loss event. Signing on to take responsibility in the event of an incident will often jolt clients into agreeing to your package.
Gaining new clients is more expensive and requires more effort than retaining existing ones. For that reason, it’s best to build on your new client’s interest in the services you provide during your partnership’s initial stages. This is the best time to sell clients on your bundle if you do not require it as part of your contract. By bundling data security, MSP sales teams get a built-in upsell that generates a mutually beneficial win-win-win scenario:
- Clients win with uninterrupted business continuity and data availability to withstand any data loss event –human error, cyberattack, or natural disaster.
- MSPs win knowing that they can recover their client’s data in the likely event it is lost, breached, destroyed, or otherwise compromised.
- MSPs win again with a higher MRR per client, contributing to margin, revenue, and profit growth.
“Acquiring a new customer can cost 5x more than retaining an existing customer.”
Quarterly Business Reviews for Relationship Building, Retention, and Revenue
Central to sales and marketing in the channel is the relationship between MSPs and their SMB clients. Quarterly business reviews (QBRs) are vital to reinforcing that relationship that can fall victim to out-of-sight and out-of-mind. Without any data loss events to recover from, businesses can forget about the value they’re receiving from their backup vendors. BCDR solutions only get to shine when a data loss event occurs. Outside of that, many SMBs won’t check in. They just want their business to run, and they’re happy as long as that’s happening.
QBRs provide a regular intersection point between MSPs and their clients outside of a disaster situation. So it’s a time to…
- Remind clients of your services and authority in cybersecurity
- Provide updates on their backup health and capabilities
- Revisit recovery features
- Complete disaster recovery testing
- Participate in incident response planning
- Introduce new product launches and upgrades
All of this value contributes to client retention, which is vital for an MSP’s bottom line. Increasing customer retention rates by just 5% can increase profits by 25% to 95%. And since retaining existing customers is cheaper and easier than acquiring new clients, it’s in an MSP’s best interest to foster these relationships regularly.
“Increasing customer retention rates by just 5% can increase profits by 25% to 95%.”
4 Ways to Maximize Upsell and Cross-Sell Opportunities
Whether you’re signing a new client or meeting with an existing client during a QBR, that face-to-face (or screen-to-screen) interaction is a huge opportunity to generate new sales. Employ these four strategies for upselling and cross-selling your clients while maintaining a security-first approach as the focus of client conversations.
#1. Provide an update on the cybersecurity landscape.
Clients look to their MSPs as guides for navigating the changing threats in today’s cyber world. Be prepared to educate on the latest threats, recent breaches to be aware of, potential loopholes in their stack, new features or services to maintain a layered security approach, and changing trends in the channel. The information will help clients justify the necessity of new security features and services and pass that information along to their own end users.
#2. Put on your business consultant hat.
As you’re reviewing the previous quarter in a QBR or getting to know a new client, do it with a broad perspective. Get to know your client’s business goals, budget, immediate needs, desires, structure, path to decision-making, and end-users. Gaining a deep and dynamic understanding of clients enables MSPs to suggest the right solutions, tools, products, and services that best fit the business. Then, tie that information with the value of your managed services to show your investment in their success, build rapport, and foster a long-term relationship.
“Existing customers are 50% more likely to try new products and spend 31% more, on average, compared to new customers.”
#3: Help with budget forecasting.
Expand conversations outside the past and present, and look to the future. What are clients planning in the next six months to a year that might impact their managed services? Things like team growth, workspace environments, device infrastructure, and target verticals influence BCDR and productivity. Assist clients in preparing for these structural and financial changes to get maximum functionality and protection within their budget.
#4: Ask for referrals.
The channel is a tight-knit group of professionals who rely on one another more than most industries. Utilize this time to remind existing clients or introduce new clients to your MSP’s referral program. It should be incentivized so clients benefit from passing along your good name. After the meeting, include a link to your referral program in follow-up communications for easy access. This is a great way to gain new leads with a built-in conversation starter for sales reps.
“77% of customers said they would recommend a brand to a friend after a single positive experience.”
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More Great Stuff From Our Blog:
Check out some other interesting pieces from our blog: Check out Part One of our Sales and Marketing Quick Guide for MSPs: Lunch and Learns, Part Two of our Sales and Marketing Quick Guide for MSPs: LinkedIn, Learn how DRaaS Opens New Opportunities for Managed Services Providers, plus- we dove into how chain-based backup works and why chain-free is the way to be, we reviewed AutoVerify Automated Backup Integrity Testing in direct-to-cloud BDR, a discussion on the best way to be choosy in the Do’s and Don’ts of Choosing the Right Clients for MSP Growth, and learn how you can ditch pricey on-site appliances with Local Cache for Direct-to-Cloud BCDR.
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