Playbooks

How to build an upsell and expansion playbook

Learn the most common upsell and expansion plays and a simple framework to build your own playbooks.

Stephen Moock

February 1, 2023
·
 min read

With an economic downturn comes greater emphasis on driving efficient revenue growth. Since successful “land and expand” motions lead to higher success rates for Sales at lower acquisition costs, upsell and expansion playbooks are now a hot commodity for nearly every PLS leader. When building them out for the first time, Sales and GTM leaders ask questions like:

  • In what ways do upsell and expansion strategies differ across PLG companies?
  • What would an upsell and expansion playbook look like?
  • How do I use product and sales data to automatically run plays?

We covered these questions (and a few more!) during the second installment of our Product-Led Sales playbook webinar series, “Upsell and Expansion Playbook.” Read on for a recap of different upsell and expansion strategies, examples of common sales plays, and easy-to-follow guidelines to build your playbook.

Looking to learn the basics of Product-Led Sales playbooks? 👉 Head over to this blog for a breakdown of what Product-Led Sales playbooks are, why they matter, and how to build a free-to-paid conversion playbook.

Unpacking the upsell and expansion strategy

We see upsell and expansion playbooks vary quite a bit across the PLG space. This is because the specific pricing or business model a PLG company uses leads to different types of sales opportunities and focuses. Below are three common approaches to pricing in PLG and their respective upsell and expansion opportunities. 

  • Seat-based pricing models, which were pioneered by the likes of Salesforce, charge by the number of users on a customer account. With seat-based models, PLG folks typically focus on both bottoms-up expansion and top-down buy-in. Here’s why: Getting someone to swipe their credit card for a $25/month plan is not nearly as difficult as convincing a decision maker to sign off on a 100-person team using the product. In order to expand successfully, sales folks need to demonstrate value to stakeholders on both ends.
  • Usage-based pricing models, which are quite common in the developer space, charge customers based on total usage. For example, an enterprise will often pay more for higher usage caps because it creates more sites, pushes more builds, and uses more bandwidth than, say, a 25-person marketing organization. Here, playbooks focus on deepening adoption with existing users, introducing new use cases and ensuring that the product is delivering value.
  • Product-based pricing models charge customers for additional or premium product functionality, as well as cross-sells into related products. With a product-based pricing model, PLG companies tend to offer an Early Access program or gated usage of premium functionality, which lets them track the usage of users who are more likely to upgrade plans.

Building winning playbooks: Upsells and expansions

There are any number of ways you can build out an upsell and expansion playbook. We recommend keeping it simple, effective, and efficient using the following best practices.

1. Use a clear, simple framework. 

To structure your sales plays, we recommend building your playbook using the  “Signal → Messaging → Action”  framework. Each stage of the framework is defined below, and you’ll see what it looks like in action shortly. 

  • The signal is the user behavior that kicks off a specific sales play
  • The messaging is how sales folks should think about the opportunity and communicate value to the customer
  • The action is the steps or tactics reps will take to run the play

2. Determine your upsell and expansion plays. 

Next, you’ll want to determine the upsell and expansion plays you want reps to act on. While sales plays vary based by pricing and business model, some common upsell and expansion scenarios we see are:

  • Scenario #1: New users added to an existing account
  • Scenario #2: An active decision maker in the product
  • Scenario #3: Usage increases right before renewal 

3. Build out steps for each sales play.

Once you’ve figured out your upsell and expansion plays, build out their steps using the “Signal → Messaging → Action” framework. To show you what this framework looks like in action, let’s break down the upsell and expansion examples noted above. 

Scenario #1: New users added to an existing account

A common upsell and expansion opportunity is when an existing account adds new users, increasing usage. For this sales play, your playbook might look like:

  • Signal: The sales play kicks off when an existing customer adds new users to the account.
  • Messaging: In this scenario, you might want reps to engage new users in an onboarding session to help familiarize them with the product. This gives Sales an opportunity to uncover any potential roadblocks and make sure the account remains healthy. If a decision maker is involved, reps can use the opportunity to explore the value of upgrading to a higher-tier plan.
  • Action: A next step here might be adding the new users and decision makers to an Outreach sequence.

Scenario #2: An active decision maker in the product

Any sales rep will tell you moving up the ladder from end user to decision maker (with purchasing authority!) is no easy feat, which is why an active decision maker in the product is an exciting signal. For this sales play, your playbook might look like:

  • Signal: The sales play kicks off when a decision maker logs in and actively uses the tool in a defined capacity.
  • Messaging: In this scenario, you’ll want reps to focus their conversations with the decision maker around the value they get from the product and the long-term business case, including any future team growth or usage needs. 
  • Action: Assuming conversations with the decision maker go well, the rep will want to create an upsell opportunity in the CRM.

Scenario #3: Usage increases right before renewal 

When customers increase usage right before renewal, it’s a prime opportunity to discuss changes to their renewal agreement, such as offering a better discount for increased usage or additional seats. In this scenario, your sales play might look like:

  • Signal: The sales play kicks off when usage within an existing account increases before renewal.
  • Messaging: Here, it’s important to levelset on the value customers are getting from the product and how to unlock even greater business value. This scenario might involve CSM engagement to identify gaps or an AE running value conversations during the QBR process.
  • Action: The rep will want to create a task to follow up with internal stakeholders to prepare for the QBR.

4. Run sales plays using an automated Product-Led Sales tool like Calixa

The final step is building your playbook in a Product-Led Sales platform that can automate your plays from start to finish. Since most upsell and expansion plays are triggered by user behavior in the product, combining product and sales data in Calixa makes flagging and acting on key upsell and expansion opportunities second nature for sales reps.

Calixa automatically alerts reps to new upsell and expansion opportunities, showing them which plays were triggered offering integrated actions to take, such as those in the example below:

  • Check current product usage, along with key metrics such as Active Users and Documents Created
  • Create an upsell opportunity in Salesforce
  • Send the decision maker a tailored Outreach sequence with product usage metrics

This easy access to product usage data, along with automatic sales play notifications and next steps, helps Sales engage with existing customers to efficiently upsell higher tiers and add-ons for greater revenue growth.

👉 Learn more about Calixa's Playbook Automation System.

Watch the full webinar

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Playbooks

How to build an upsell and expansion playbook

Learn the most common upsell and expansion plays and a simple framework to build your own playbooks.

Stephen Moock
|
Head of Sales and Success
|
Calixa

Your PLG roundup in 5 minutes.

February 1, 2023
ReadTime

With an economic downturn comes greater emphasis on driving efficient revenue growth. Since successful “land and expand” motions lead to higher success rates for Sales at lower acquisition costs, upsell and expansion playbooks are now a hot commodity for nearly every PLS leader. When building them out for the first time, Sales and GTM leaders ask questions like:

  • In what ways do upsell and expansion strategies differ across PLG companies?
  • What would an upsell and expansion playbook look like?
  • How do I use product and sales data to automatically run plays?

We covered these questions (and a few more!) during the second installment of our Product-Led Sales playbook webinar series, “Upsell and Expansion Playbook.” Read on for a recap of different upsell and expansion strategies, examples of common sales plays, and easy-to-follow guidelines to build your playbook.

Looking to learn the basics of Product-Led Sales playbooks? 👉 Head over to this blog for a breakdown of what Product-Led Sales playbooks are, why they matter, and how to build a free-to-paid conversion playbook.

Unpacking the upsell and expansion strategy

We see upsell and expansion playbooks vary quite a bit across the PLG space. This is because the specific pricing or business model a PLG company uses leads to different types of sales opportunities and focuses. Below are three common approaches to pricing in PLG and their respective upsell and expansion opportunities. 

  • Seat-based pricing models, which were pioneered by the likes of Salesforce, charge by the number of users on a customer account. With seat-based models, PLG folks typically focus on both bottoms-up expansion and top-down buy-in. Here’s why: Getting someone to swipe their credit card for a $25/month plan is not nearly as difficult as convincing a decision maker to sign off on a 100-person team using the product. In order to expand successfully, sales folks need to demonstrate value to stakeholders on both ends.
  • Usage-based pricing models, which are quite common in the developer space, charge customers based on total usage. For example, an enterprise will often pay more for higher usage caps because it creates more sites, pushes more builds, and uses more bandwidth than, say, a 25-person marketing organization. Here, playbooks focus on deepening adoption with existing users, introducing new use cases and ensuring that the product is delivering value.
  • Product-based pricing models charge customers for additional or premium product functionality, as well as cross-sells into related products. With a product-based pricing model, PLG companies tend to offer an Early Access program or gated usage of premium functionality, which lets them track the usage of users who are more likely to upgrade plans.

Building winning playbooks: Upsells and expansions

There are any number of ways you can build out an upsell and expansion playbook. We recommend keeping it simple, effective, and efficient using the following best practices.

1. Use a clear, simple framework. 

To structure your sales plays, we recommend building your playbook using the  “Signal → Messaging → Action”  framework. Each stage of the framework is defined below, and you’ll see what it looks like in action shortly. 

  • The signal is the user behavior that kicks off a specific sales play
  • The messaging is how sales folks should think about the opportunity and communicate value to the customer
  • The action is the steps or tactics reps will take to run the play

2. Determine your upsell and expansion plays. 

Next, you’ll want to determine the upsell and expansion plays you want reps to act on. While sales plays vary based by pricing and business model, some common upsell and expansion scenarios we see are:

  • Scenario #1: New users added to an existing account
  • Scenario #2: An active decision maker in the product
  • Scenario #3: Usage increases right before renewal 

3. Build out steps for each sales play.

Once you’ve figured out your upsell and expansion plays, build out their steps using the “Signal → Messaging → Action” framework. To show you what this framework looks like in action, let’s break down the upsell and expansion examples noted above. 

Scenario #1: New users added to an existing account

A common upsell and expansion opportunity is when an existing account adds new users, increasing usage. For this sales play, your playbook might look like:

  • Signal: The sales play kicks off when an existing customer adds new users to the account.
  • Messaging: In this scenario, you might want reps to engage new users in an onboarding session to help familiarize them with the product. This gives Sales an opportunity to uncover any potential roadblocks and make sure the account remains healthy. If a decision maker is involved, reps can use the opportunity to explore the value of upgrading to a higher-tier plan.
  • Action: A next step here might be adding the new users and decision makers to an Outreach sequence.

Scenario #2: An active decision maker in the product

Any sales rep will tell you moving up the ladder from end user to decision maker (with purchasing authority!) is no easy feat, which is why an active decision maker in the product is an exciting signal. For this sales play, your playbook might look like:

  • Signal: The sales play kicks off when a decision maker logs in and actively uses the tool in a defined capacity.
  • Messaging: In this scenario, you’ll want reps to focus their conversations with the decision maker around the value they get from the product and the long-term business case, including any future team growth or usage needs. 
  • Action: Assuming conversations with the decision maker go well, the rep will want to create an upsell opportunity in the CRM.

Scenario #3: Usage increases right before renewal 

When customers increase usage right before renewal, it’s a prime opportunity to discuss changes to their renewal agreement, such as offering a better discount for increased usage or additional seats. In this scenario, your sales play might look like:

  • Signal: The sales play kicks off when usage within an existing account increases before renewal.
  • Messaging: Here, it’s important to levelset on the value customers are getting from the product and how to unlock even greater business value. This scenario might involve CSM engagement to identify gaps or an AE running value conversations during the QBR process.
  • Action: The rep will want to create a task to follow up with internal stakeholders to prepare for the QBR.

4. Run sales plays using an automated Product-Led Sales tool like Calixa

The final step is building your playbook in a Product-Led Sales platform that can automate your plays from start to finish. Since most upsell and expansion plays are triggered by user behavior in the product, combining product and sales data in Calixa makes flagging and acting on key upsell and expansion opportunities second nature for sales reps.

Calixa automatically alerts reps to new upsell and expansion opportunities, showing them which plays were triggered offering integrated actions to take, such as those in the example below:

  • Check current product usage, along with key metrics such as Active Users and Documents Created
  • Create an upsell opportunity in Salesforce
  • Send the decision maker a tailored Outreach sequence with product usage metrics

This easy access to product usage data, along with automatic sales play notifications and next steps, helps Sales engage with existing customers to efficiently upsell higher tiers and add-ons for greater revenue growth.

👉 Learn more about Calixa's Playbook Automation System.

Watch the full webinar