How to Identify Upsell Opportunities to Maximize Your Profitability
If you run an agency of any kind, make upsell opportunities a cornerstone of your expansion strategy.
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For agencies and other service consultancies that specialize in small businesses, few things can be more helpful for increasing revenue and the lifetime value of your clients than making the most of upselling opportunities.
The business-to-business equivalent of a McDonald's employee asking if you'd like to upgrade from small to medium fries, upselling is your way of offering more to clients so they deepen their commitment to your agency. By better understanding what upselling opportunities look like, why they matter and how to better implement them in your own agency, you can maximize your earning potential like never before.
What do upsell opportunities look like?
There's no one size fits all approach to upselling. Some of the most common types of upsells include a product or service upgrade, encouraging customers to buy products in multiple quantities, offering product or service customizations and extended service periods.
For agencies, this provides valuable flexibility — and multiple ways to upsell.
For example, an agency could offer monthly marketing service plans but upsell to its clients by also offering an annual plan. This annual plan could be offered at a slight discount compared to the monthly plan but has the advantage of keeping clients "locked in" with the agency for an extended period of time.
Another option could be encouraging clients to purchase additional marketing services. For example, a small business client might come to an agency seeking a new graphic or logo, and the agency could also offer to provide web design services so that the company's website matches its new graphics. With each of these upsell opportunities, the end goal should be finding ways to create additional value for your clients.
Are there services adjacent to the ones you already offer that makes sense for clients but aren't in your wheelhouse? For example, maybe your agency writes great content but lacks the ability to optimize it for search. Or maybe you capture new leads for your small business clients but don't use triggered automation to nurture those leads. In cases like these, it might make sense to team up with other providers and technology partners so you can white-label their services.
Related: Customer Service Is the New Upsell
Why upselling matters for agencies
In a survey of small businesses conducted by vcita, over 68% of respondents said they handle all of their own marketing, compared to under 24% that outsource their marketing to an agency. This is indicative of the fact that agencies often struggle to offer value to small business clients — or to effectively communicate how they can offer value — and it points to major opportunities for agencies that excel in this regard.
Upselling is easier for agencies that are great at communicating their unique value propositions and that can tailor their packages to the specific needs of potential clients on an agile basis. Depending on the type of upselling offer you make, it can showcase the extent to which you're paying attention to the needs of your clients. It also helps highlight the versatility your agency offers — how you can become a true "one-stop shop" for clients to effectively manage all of their marketing needs.
Then, of course, there's the fact that upselling can be a powerful driver of revenue. A survey by HubSpot found that 72% of salespeople who upsell report that it drives up to 30% of their company's revenue.
The 80-20 rule (or Pareto Principle) also applies here — where 80% of revenue is derived from the top 20% of clients. Upselling can help you maximize the profitability of your agency's top clients, ensuring more focused sales efforts that deliver stronger results.
How to maximize your upselling potential
The previously cited HubSpot survey found that 88% of salespeople try to upsell their clients. Of course, this doesn't mean that every upselling attempt is going to be successful. The most effective agencies focus on ways that their upsell offers create genuine value for the customer rather than just getting a one-time profit increase.
This requires truly understanding the SMBs you work with and their unique pain points. Analytics are only part of the story. You need to take the time to talk to prospects and understand their specific needs. Listen to their feedback so you can build trust and strengthen your relationship.
By taking the time to know your clients and prospects, and pairing that with a deep knowledge of your diverse network's capabilities and services, you can then provide tailored, compelling upsell recommendations. When recommendations are truly aligned with a client or prospect's needs and pain points, they will see your ability to provide relevant service that truly adds value.
To do this successfully, Adobe recommends limiting how many upsell options you provide a client. Too many options can ultimately lead to analysis paralysis that makes it harder to reach a decision — or could drive a client away entirely. Upsell recommendations should also strive to remain within 25% of the SMB's planned budget, as a dramatic price increase can similarly deter clients.
Upsell can (and should) be a priority with current clients — those who already have some level of trust in your agency. Something as simple as a quarterly or semi-annual check-in can help gauge whether a client is satisfied with your agency's services, as well as provide opportunities to identify new ways your agency can add more value through upselling. Active listening during these client conversations can be especially crucial for identifying upsell options your sales team can pitch at the moment.
Related: 4 Things That Make for Unforgettable Customer Experiences
Make the most of your sales opportunities
Regardless of the client, you should consider potential upselling opportunities with every sales interaction. Whether that's getting a client to order additional deliverables or having them upgrade to a higher "tier" of service, upselling isn't just a chance to get a one-time bump in revenue from a client.
It is also a way for you to further showcase your best work — and why you're worth partnering with for the long haul. When you upsell effectively and then deliver on the promises you made during the sales process, you will set your agency up for lasting success.