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Scaling is a hot topic right now. Companies are desperate to do it through any means, even by taking on funding – VC funding or PE funding, in order to scale revenue.
Today, I’m going to share with you one of the best ways to scale revenue that is hiding in plain sight. It’s a resource that few companies tap into to the fullest potential.
I’ve found examples of 3 companies that are doing this extremely well, and that is selling your existing customers more products and services every single year.
Tapping into your existing customer base for revenue growth is this resource hiding in plain sight that I am referring to.
Example #1: Salesforce is one company that leverages their existing customers to the extent that 73% of their new bookings come from existing customers.
You’ve heard me talk extensively about how smart this is from a company’s perspective. I’ve seen as high as 80% of revenue coming from existing customers before.
These deals are great because:
They close faster than new deals (⅓ of the time)
There is less paperwork involved
Trust is already established
This is just a massive lever that can be pulled to scale revenue.
Example #2: Zoom is a company with around $2 billion in annual revenue. Zoom is selling their existing customers 30% more for at least 13 quarters in a row. They are clearly doing something right to continually upsell their existing customers more and more each quarter.
Example #3: Slack just got acquired for close to $28 billion. They have $1 billion in annual recurring revenue. Slack is actually adding more new seats from existing customers than from new customers every month.
I realize you probably aren’t the size of a Slack, Zoom, or Salessforce. But you don’t have to be, to put this tactic in play in your company. There is a beautiful simplicity in this process.
The fastest way to add revenue to your bottom line is:
Create cross sells
Create an expansion engine
So, that’s easier said than done, right? Not so fast. It’s actually much easier than you think.
Understand your customer and have a continuous review process with them.
Compensate your sales reps for upselling your existing customer base.
Always be seeding news sales and selling in every review.
This is so critical because every time you solve a problem for a client, several new ones will probably pop up.
When you do this you will begin to build a recurring sales engine, just like Salesforce, Slack or Zoom.
Many times, people step over dollars to pick up pennies. New customers are not the only way to drive revenue. Your existing customers are waiting for you.
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