Glossary
Upselling
Upselling is getting a customer to buy a higher tier, a bigger plan, more seats or extra capacity of the product they already use or are about to buy. It raises revenue per account and is a main driver of expansion revenue.
What Is Upselling?
In short In SaaS, upsells usually follow usage: more users, more records, higher volume or features that only a higher tier has.
The best moment is when the customer hits a limit or a goal, because then the upgrade is the obvious next step rather than a pitch.
Expansion revenue from existing customers usually costs less to win than new business, since there's no new lead to find and no new vendor to approve. Upsells are a main reason some companies keep net revenue retention above 100%, the point where revenue from existing customers grows even with no new sales.
Upselling Example
Example: a customer on a 10-seat plan at $50 per seat a month ($500 MRR) hires 8 new reps. The account manager offers a volume price of $45 per seat, and the customer moves to 18 seats at $810 MRR. That's $310 of expansion MRR, a 62% increase on the account.
Upselling in Practice
Who owns the upsell varies: account managers in many B2B companies, customer success managers in others, sometimes the original AE. Teams that do it well agree on usage triggers that open an upsell conversation and track them in the CRM, so the outreach is timely and specific instead of a generic upgrade email.
FAQ
What is an example of upselling in SaaS?
Moving a customer from 10 seats to 25, from a basic tier to a professional one, or to a plan with a higher usage limit when they're about to hit the current one.
What is the difference between upselling and cross-selling?
Upselling sells a higher-priced version of the same product. Cross-selling sells a different product that complements it. Salesforce's laptop example: a more powerful laptop is an upsell, a case is a cross-sell.
When should you upsell a customer?
When the customer hits a limit, adds people or reaches a goal that the higher tier supports. Usage data and account reviews show those moments; an upgrade pitch without one usually lands as a price increase.
Is upselling the same as expansion revenue?
Upselling is part of expansion revenue, alongside cross-selling and usage growth. Together they're what push net revenue retention above 100%.
The new Ken opens to the waiting list in batches.
Related
Sources
| Source | Checked |
|---|---|
| Salesforce: What Is Upselling? | |
| Salesforce Learning Centre: What Is Upselling? | |
| HubSpot: What Is Cross-Selling? (cross-selling vs upselling) |
Changelog
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