SaaS Requires Excellent Support Not Upselling to Proliferate

Written by Sean Murphy. Posted in Startups, TwoWeekSaaS

Rich Mironov profiles Replicate Technology (a current client) in Service Revenue and Upsell Marketing” and mischaracterizes–in our opinion–their strategy as upsell marketing.

replicate technologies logoReplicate’s services are sold as a test lab: when a new customer is just starting out and only needs to test one or two configurations they get by very cost effectively. As the customer’s needs become more complex, or their development staff grows, in the same way that they would need to add to a physical test lab, they can instead add more virtual lab capacity.

Besides scaling up with them as they grow, Replicate offers several key benefits that Rich Mironov identifies:

“By offering this as a service, Replicate saves 90%+ for customers versus licensing and running virtualization software in-house, with:

  1. An instantly working solution
  2. No need for customer to hire or train skilled virtualization engineers
  3. No need for customer to buy, maintain or manage dozens of servers
  4. No upfront capital expense
  5. Ability to add capacity (servers, configurations, storage) when needed
  6. Easily shareable test resources for geographically distributed teams
  7. Ability to “snapshot” systems with software defects and “replay” the defects for software developers”

But what’s really required is excellent service. The cost and flexibility advantages are clear; what’s needed is a “proliferation / evangelism” strategy to continue to get the word out from beachhead users about the benefits that have been delivered.

My definition for upselling matches closely to the Wikipedia definition:

Upselling is a sales technique whereby a seller induces the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale. Upselling usually involves marketing more profitable services or products but can be simply exposing the customer to other options that were perhaps not considered.

This is not Replicate’s challenge.

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