Identifying Expansion Opportunities
Why do we need to create opportunities from existing customers? A Pacific Crest Survey from David Skok and Matrix Partners show that the cost to acquire a dollar from a new customer is $1.16, while for an existing customer it is $0.27 for up-sell and $0.20 for plan expansions. Which means you can earn back the customer acquisition cost in a quarter rather than a year. Here is the key factors that I believe are good identification markers for an expansion opportunity.
The Net Promoter Score is an index to measure the customer loyalty and their willingness to recommend a company’s product or service to others. NPS is a key indicator for growth as it measures the customer experience and predicts business growth. Read more about NPS here.
NPS segments its responders as Promoters, Passives and Detractors. We can reach out to the Promoters
as they are our happy customers. We can also reach out to the Passives on a case by case basis.
Potential teams within company
When you are in a comfortable relationship with the customer where you are confident that what you suggest will be taken into consideration in a positive way, it does not hurt to ask if there are any other team that can take advantage of the product.
Understand the activity of a customer will give you an option to predict the opportunity even before the customer realizes that he needs a higher plan or a better feature.
Say, customer X is using the most basic plan of a ticketing tool for a 3-member support team and the ticket inflow per fay is 200, which is more than the team can handle. This gives you an opportunity to suggest automations and auto-responders if it is available in the higher plan.
It wouldn’t make sense for a customer if they are not using the major features, aka core features listed as a part of their subscription. The ideal way to go about it is to understand and list out the core features.
Check if the customer is using all the core features available in his plan, if not enable them to use all the features available. Chances of customer upgrading is much higher when they understand how much they can be benefitted as a business.