SaaS Product Marketing – Upgrade and Upsell Strategy.

I think it would be hard to overemphasize the importance of upgrades and upsells in SaaS product marketing. In an industry where free trials, freemium versions, bargain basement subscription prices and simply hoping to recover customer acquisition cost with first year revenue are the norm, few things are sweeter than a customer that actually wants to spend MORE money with you. Upgrades and upsells can lead to orders of magnitude difference inSaaS financial metrics. If you can acquire customers at $100/mo and rapidly upgrade them to $1,000/mo, then you may be able turn a profit in one year instead of ten years. And. if those $1,000/mo customers have alifetime value of $100,000 instead of $10,000, then you may also turn a $50million SaaS company valuation into a $500million SaaS company valuation. ‘Nuff said.

Upgrade vs. Upsell in SaaS

Although the terms upsell and upgrade are often used interchangeable, I personally use them to distinguish between two very specific SaaS product marketing scenarios. For the purposes of this discussion, I will use the following definitions:

• Upgrade : Higher revenue from increased usage of current SaaS product capabilities.
• Upsell : Higher revenue from new SaaS product capabilities.

Continues @http://www.cloudave.com/4645/saas-product-marketing-upgrade-and-upsell-strategy/

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