More MRR for Your MSP: 10 Upselling and Cross-Selling Tips

Monthly recurring revenue (MRR) is an MSP’s bread and butter. And while getting new clients to sign up for services is the most obvious way to keep MRR growing, there’s also another avenue to pursue — getting more MRR from your current customers through cross-selling and upselling managed service provider solutions.

Cross-selling is the practice of selling a secondary product or service to a customer in addition to the primary product or service they set out to purchase, while upselling is the practice of selling a more expensive, higher-value version of a product or service to a customer who originally set out to purchase a less expensive, lower-value product or service.

Acquiring a new customer costs five times as much as retaining an existing customer, so focusing solely on acquisition is not a sustainable strategy for managed service providers. Upselling and cross-selling are efficient ways to capitalize on MRR growth from existing clients while still  searching for new ones.

Here are 10 tips for building a successful upselling and cross-selling approach. 

1. Recognize upsell and cross-sell opportunities based on client needs.

Upselling and cross-selling have the potential to improve customer experience, loyalty, and trust — but only when the higher-value/additional services actually offer extra value to the client. Identify what will be useful to your client based on what you know about their business.

2. Target high-value clients first.

Larger organizations with high customer lifetime value are more likely to have the budget for increased services. When price isn’t a top concern, it’s a lot easier to convince someone to purchase additional items.

3. Map out customer journeys.

Gain a solid understanding of your clients’ motivations, needs, and pain points so you can identify the best products and services to offer at each point in the journey.

4. Focus on satisfied clients.

Clients that are thrilled with the services they already receive from your MSP are much more likely to spring for that add-on service or higher-value package. Don’t try to upsell or cross-sell to a client who’s less than completely satisfied. If you collect NPS data, you can use it to determine who’s qualified as a target.

5. Make sure your sales and customer experience teams are pros at cross-selling and upselling. 

Your teams need to be able to educate clients on what exactly they’re buying and how it’s going to be beneficial to them. Provide a knowledge base of resources they can use to hone their cross-selling and upselling skills.

6. Showcase past successes to demonstrate value.

In addition to letting clients know how your services will benefit their specific organization, present case studies, testimonials, and positive customer reviews that illustrate your MSP’s track record.

7. Create package deals.

Clients are generally more inclined to buy a service when they don’t have to make a separate purchase, so bundle services strategically to maximize MRR. You can also offer free trials and discounts for add-on services as part of bundles to make them even more appealing.

8. Be solution-oriented, not pushy.

Most clients can tell when someone’s giving them a generic sales pitch. Frame the upsell/cross-sell opportunity in terms of what each specific client would benefit from, and try to offer genuine solutions rather than pushing them to buy an irrelevant product or service.

9. Reward loyalty and forge strong connections.

Small gestures like thank you letters, swag bags, gift cards, and special discounts make clients feel special and help build loyalty for your MSP. That goes a long way when it comes to cross-selling and upselling. 

When presented with the option to buy higher-value/additional services, the client might look back on that nice thank you letter they received and feel more inclined to make the purchase.

10. Follow up.

Even if you don’t successfully upsell/cross-sell to a particular client on the first try, continue to nurture that business relationship by making sure goals and expectations are being met for the services they did purchase. Letting clients know that you care can lead to more upsell/cross-sell opportunities in the future.

The best strategy for upselling and cross-selling is to provide value to your clients. In addition to boosting vital MRR, successful upselling and cross-selling can result in lower churn rate, higher profit margins, and more opportunities for referrals and case studies, which will all benefit your MSP’s long-term growth.