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Are you losing out on winning easy opportunities?


When offering subscription plans to your customers, many businesses still focus on bringing on new subscriptions, rather than expanding subscriptions for your existing customers. It is mission critical to find a healthy balance between selling net-new customer subscriptions, and generating more recurring revenue from current subscriptions.


It is natural to increase your revenue by winning new deals. As a subscription business you need to be able to keep up your net-new sales, but at the same time it is just as important to serve new add-ons or extensions to your existing subscriptions. As a business outcome you can set up a healthy mix of generating new and “add-on” recurring revenue.

Smart companies can increase their subscription sales by an amazing 10 percent to 25 percent or more simply by effectively selling add-ons.


How to drive more subscription add-on revenue:


#1 — Start with the facts

To get started with understanding your revenue composition, we recommend tracking your renewal ratio and definition of add-on sales, so that you can build an analytical view of the several types of revenue you are generating. Each subscription line should be linked to a reason code or revenue indicator for data analysis. Examples are new subscription, add-on subscription, downgrade or upgrade. Use reason code-based reporting to be able to segment your revenue in distinct categories.

#2 — Innovate surrounding services and products for your core subscriptions

As you invest in new subscription offerings, think about the customer’s needs. If you sell software, it would be great to supply access to eLearning portals or supply new reporting add-on packs to increase the value. Creating memberships or partner programs can also drive add-on revenue, for example: customers can opt-in to a membership offering them free support for deliveries, like Amazon Prime did. These new surrounding capabilities extend your core subscription offering and add more recurring revenue to the bottom line.

#3 — Use technology to scale upselling capabilities

Depending on your subscriber base of customers, B2C or B2B, you can use technology to generate new upselling opportunities. Let’s review a few options:

  • Empowering Sales and Customer success or services users with the option to add on more sales to a quote. This can be achieved by guided selling showcasing which add-on products a customer could buy or showing surrounding service plans (support/maintenance/memberships) and letting the user add those easily to a quote. They won’t miss the opportunity to sell more as the CPQ flow guides them to ask the right up and cross selling questions in the moment of creating a quote and pricing it.
  • Establish a process to generate new opportunities based on existing subscriptions where products or services that could add-on to that plan are prepared as an opportunity, which can then be sent to the customer as a promotion.
  • Run a process that can get all subscription plans expiring in x days (keeping in mind the pre-invoice feature), with a renewal of e.g. 1 year, create an opportunity that quotes a 3 year plan with a discount or cash back option to motivate customer to renew for 3 years instead of 1 (more ARR), once the quote accepts we can turn it into a subscription chain automatically and run it.

Smart companies can increase their subscription sales by an amazing 10 percent to 25 percent or more simply by effectively selling add-ons.

Add-ons are a win-win. Customers often have an increase in satisfaction with the purchase as well as the increased convenience of one-stop shopping.


Then why don’t most subscription businesses not sell add-ons regularly?


Many salespeople intuitively and correctly sense that pushing or even nudging a customer to make a larger purchase sometimes pushes the customer too far out of his comfort zone and they could end up losing the entire sale — either temporarily or permanently.

The gain for the sales team is once a customer has agreed to buy from you, getting him to make an additional add-on sale is far easier and more profitable than finding a new customer.

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