How to Grow Payroll Revenue Without Finding a Single New Client

[00:00:00] So I pulled ADP's investor transcripts last week and I found some interesting data points that really validated what I already knew and we should all be familiar with as independent payroll bureau owner and operators. ADP has over 8,500 sales reps, a billion dollar marketing budget. They're the biggest name in payroll, but yet they expect half of all their new revenue every single quarter to come from clients they already have.

[00:00:27] So think about that half of their new revenue is going to come from their existing client base, not new logos, not cold outreach, not ads, existing clients. And when they upgrade one of those existing clients from basic payroll to a full HR relationship like ASO or PEO, they're expecting 10 to 12 times the revenue over the lifetime of that customer.

[00:00:49] 10 to 12 X over the lifetime. So same client, deeper relationship gets us a much, much higher multiple on our LTV. But now here's the part that you should be really interested in. And the part that I saw firsthand is that they built an entire sales structure around that. So dedicated reps, formal processes, propensity models, quarterly reviews, all pointed at clients who are already paying them. So most of us as independent bureaus, we're treating our client base like their accounts simply to be service, not revenue to be grown.

[00:01:19] But when we look at this blueprint, we can find ways that we can go in and maximize the lifetime value from the customers that we've worked so hard to go out and acquire in the first place. And we want to make sure that we retain them as long as humanly possible. Welcome to Payrollin', the show where you will learn how to operate and grow your payroll business from the most dynamic minds in the business.

[00:01:48] If your company offers payroll services, this is the podcast for you. And now here's your host, Matt Vady. Let's go. So for those of you who are joining new this week, we've been building on the growth grid that we shared last week. So you can check out that video on YouTube. It's four quadrants.

[00:02:12] In those four quadrants, we have one-to-one in terms of outreach, one-to-many in terms of outreach. So one-to-one would be direct conversations, phone calls, emails, direct messages. One-to-many would be things like newsletters, content, paid ads. And then we have warm audiences, which are people who know you, and cold audiences, which are people who don't know you. So if you think about that, there's only, you know, I can go one-to-one with a cold person who doesn't know me. I can go one-to-one with a warm person who does know me.

[00:02:41] I can go one-to-many with warm people who know me and one-to-many with cold people who don't know me. So warm people might be my LinkedIn connections. Cold people might be a targeted Facebook ad. So in this particular case, today we're going to be talking about one-to-one and one-to-many with our warmest quadrant, our warmest audience, and that is our existing clients. And so the data tells us that this is a really, really good opportunity for most of us.

[00:03:07] And for those of you that are a little bit newer, I would caution, you know, less than 50 clients. I would probably not spend a whole lot of time and energy focused on upselling. That actually got me into a lot of trouble in the early stages. We kept adding products and services based on whatever whim or need our first handful of clients had. And that got me a little distracted. We started offering everything to everybody and that eventually all came crashing down one quarter when we just couldn't serve them well. We lost three of our biggest customers all at once.

[00:03:35] And that was a complete byproduct of us just trying to do too much for too few. But really what we want to do is once we get up above 50, 100, 200, 300, 400, 500, then we want to start to look at, you know, is the founder or our only salesperson going to be doing some outreach inside of our client base? Are we going to hire a dedicated client success specialist whose whole job is to make sure that they're expanding those accounts?

[00:03:59] Because if you get, you know, a couple hundred bucks a month from a payroll account, but you've got other products, you know, whether it's time and attendance, whether it's HRAS, whether it's benefits, workers comp, there's a multitude of things that you can sell in your client base. And we're going to talk about that a little bit after this video. So if you're not with us live right now and you're watching this on YouTube, what's happening is I'm sharing this little bit of information with a group and then we're going to talk further about it afterwards behind closed doors.

[00:04:25] So make sure you register in the show notes down below this video where you can join us each week. But we're going to talk about what are some of your most profitable upsells that you have for your customers and how do you go about this? For us, we've got a couple of different plays we use at Guru and in my previous lives when we come to client upsell. So when we look at it, first and foremost, we want to think about it. Where is the white space in our client list? And so the easiest way to visualize this would be one of the most simplistic ways to execute it.

[00:04:55] And that is a spreadsheet with across the top in a row, all of the products and services we offer. And down the left, a list of our clients. And then we can look at, hey, are they eligible or are they a good fit for this product or service? So, for example, we might have a 25 employee group that is not using our time and attendance, but we can see inside the payroll system they have 20 employees who are hourly. Well, that's a great product market fit for our time and attendance solution.

[00:05:21] So we should check that and we should be looking to reach out to that customer about our time and attendance solution. And you get it from there. It depends on what products or services you offer. But in the short term, what you're going to want to do, and this depends, I've got two different tracks here. So if you're founder-led sales and you're doing the selling internally, maybe with your CS team, you're going to just want to pull your top 20 to 25 clients, put them in that spreadsheet and start to think through what are some of the upsell opportunities there.

[00:05:46] If you have a sales team, then you're going to want to maybe move into a little bit more progressive of an approach, which would involve a QBR, so a quarterly business review. But if I'm reaching out, let's talk first and foremost about if I'm just doing that white space analysis with my existing customer base and I'm reaching out to them, I would just want to have non-salesy strategic conversations about, hey, I was reviewing your account this week and I noticed you're not using our time and attendance and you have 20 employees who are hourly.

[00:06:16] Are you handling that somewhere else? Likely you already know how they're handling time and attendance, so you've got a pretty easy sales pitch. You're going to have purview into that as the payroll provider. So, hey, I know you guys are doing this manually. Let's talk about the ROI of automating this. Such an easy conversation for TLM. There was a point in time when I was at ADP that we had reps that all they were doing was selling time and attendance. They were product-based, not just client-based.

[00:06:41] So it got even deeper and more niche rather than simply, hey, I would have a list of accounts where I was calling into and trying to upsell them all of our products. I was literally selling one product to a group of clients. And to put some perspective on this, at one point I was a client sales rep at ADP. I had about 180 listed accounts and a $450,000 quota on those 180 accounts. And those were 50 to 99 predominantly, but 50 to 150 was the full scope in terms of size. So they were not massive accounts.

[00:07:10] 50 to 150 lives on average, 180 accounts. And I was expected to sell nearly a half a million dollars into those accounts. And I did it. And one of the biggest reasons why was, like we talked about earlier, being able to offer HR services. And just because you don't offer HR services in-house doesn't mean you can't partner with somebody and get a rev share on those HR services as well and bring them in to sort of be your makeshift ASO.

[00:07:34] So if we're looking at that from a, I'm the founder, I'm the sole salesperson, I want to keep it as simple as possible. We even have this set up here inside of our Zoho CRM. We have a view that we call our white space view where we have fields for each of these products. And then we have our list of clients. So when I pull up in that view in the CRM, I can see where there's white space. So that way we can try to get that data as well.

[00:07:57] So, for example, if I'm trying to sell workers' comp policies into my clients, then I can see I don't have their workers' comp renewal date in here. That is white space for me to reach out. Hey, what's your workers' comp renewal date? Are you happy with it? Let's talk about it at your next renewal. And one of the most overlooked triggers for workers' comp is fairly obvious. Most of us get customer support tickets regularly from our customers. Hey, we have a workers' comp audit. I'm looking for these reports in the payroll system.

[00:08:24] Well, that's a great lead right there that they need your workers' comp pay-by-pay so that they can get off the audit trail, right? So tons of opportunities. And we're going to talk about different ways to find these opportunities inside of your client base here shortly. I talk to founders in the payroll, HR, and accounting industry every single day. They all tell me they need more of one thing. It's not more money. It's not more AI tools.

[00:08:53] It's more time. How do I get more time? Well, I hired a virtual assistant through OutsourceScale.com that helps me manage my inbox, manage my calendar, handles administrative tasks for me, helps support my marketing efforts, and much, much more. The cool thing about OutsourceScale is that they actually train the virtual assistants on the latest and greatest AI tools to make sure that they can't only do that administrative work for you that you need to get off your plate,

[00:09:20] but they're doing it in the most efficient and effective ways possible. I've been so happy with my assistant from OutsourceScale that I've actually added multiple other teammates to our other companies through them. Their pricing starts at only $7.99 a month, and they make it super easy to get a new teammate onboarded and part of your team very quickly. Check them out today at OutsourceScale.com.

[00:09:49] So as we're looking at our client base, let's look at, you know, doing sort of a 90-day scan from there. If I have a list of clients that I've got top 20, I can look at the different things that are changing inside of the business. Are they adding people? How much has their headcount changed over the last 90 days? And making sure that we're staying in front of them a little bit more systematic fashion. And now one of the things that has now made this easier than ever is that these changes.

[00:10:14] So for us, we use Zoho Desk, which the AI inside of Zoho Desk is not great in terms of a customer support system. Most customer support systems all have some sort of AI built into them now. But there's a Claude MCP that layers into Zoho Desk that I can simply ask Claude and say, hey, surface any tickets for me over the last 90 days that meet these five potential buying triggers. And I can put those buying triggers in. It will start to surface the tickets for me that have those in them.

[00:10:42] I can also export tickets from Zoho Desk, put them into Claude Cowork, and have it start to categorize some potential upsell opportunities over here in a separate folder and do that whole thing for me and even build out the talk tracks for me of what to reach out them for. Let it know what products I have, what potential triggers to look for, and it will find additional opportunities for me there as well. And one great example of somebody who worked this white space model really well publicly was Paychex.

[00:11:12] So they recently acquired Paycor, got 50,000 clients overnight. They didn't just hand those accounts to reps and say, go figure it out. They built a lead scoring system. Which of these clients, based on size, industry, and current product usage, are most likely to buy our HR or PEO services because those are our biggest ticket items. So make sure you know what your biggest ticket items are that you're trying to upsell. So you're calling the right ones first, and then you can do that inside of the spreadsheet,

[00:11:39] inside of the CRM, or inside of your AI tool of choice, as long as you are following security protocols with the client data in there. All right, so let's talk about the next step. So if I go beyond just sort of the simple spreadsheet or CRM view, and just reaching out to customers as I see potential needs, as I see white space, making this part of my cadence, I want to get with my team. If I'm in that space too, I also want to make sure I'm getting with my CS people once a month, reviewing that list, make sure they know who we're targeting for what services,

[00:12:09] so they can be aware of that during those conversations. And offering some sort of small spiff in exchange for surfacing those leads as they come up, it's a great way to keep their ears open for this. But if we're looking at that once a month, once every couple of weeks, and they're aware when they take a call from a customer that these are potential solutions they may need, they're going to be much more likely to ferret out some leads for you. Now let's talk about the QBR layer. So if you have salespeople, if you have somebody who's sitting in an account management role or a client role,

[00:12:36] you're going to want them reaching out to your largest accounts, if not your highest opportunity accounts, and having quarterly business reviews. So these should be scheduled every quarter, non-negotiable. You should be looking to provide value to your customer first and foremost. Hey, how have you been using us? How can you be using us better? And then what other opportunities are there for you to do your business more efficiently by partnering with us at a deeper level? So it's going to require some prep work.

[00:13:04] It's going to require finding, you know, what tickets do they have open? What are some issues we've resolved for them in the past six months, or excuse me, 90 days? And then you identifying what are some potential solutions I can bring into the backside of this conversation each way. And, you know, as we talked about last week, if you weren't here, you know, clients appreciate this. Oftentimes clients will end up leaving because they find solutions that you offer other places. It reminds me of this great story I heard. A guy goes and has dinner at his grandmother's house,

[00:13:33] and she's trying to give him food. She's an immigrant grandmother. She keeps trying to give him more food. He says, ah, I'm full, I'm full, I'm full. And she murmurs something in Italian as she walks away, and he looks at his dad and goes, what did she say? He said, yeah, your supper stomach is full, but your dessert stomach is empty. And so all of our customers have different budgets for different products and services, right? So they might have come to you for payroll, and they might have subsidized their entire payroll budget with you, but that doesn't have anything to do with workers' comp,

[00:14:01] with time and attendance, with benefits, with HR services. Like, they're different stomachs and different budgets. So you want to make sure that you look to come back and upsell the things that were still available there for you. So it's an easy conversation. You know, be, again, opportunistic in how you present the information, trying to create value. One thing we haven't helped you with yet is automating your workers' comp and making sure that it's paid with every single payroll so you don't have an annual audit.

[00:14:31] Is it worth a quick conversation where we can evaluate this deeper? And you're not closing, you're not pressing hard, but you're opening a door for a new opportunity. Now, I think the greatest opportunity we have, again, goes back to the AI piece. Like, we're going to be able to find buying signals faster than ever inside of our customer support system, inside of our client data, and find those easily with the CRM. And I think that if you're not running that type of query on your customer information at this point,

[00:15:01] you're missing out on people that are potentially going to leave. So I think, you know, it was probably a month ago we did an episode on venture. I went out there and visited their headquarters. They talked about a tool that they built that did customer sentiment analysis. And of the 100 customers that it said was going to leave January 1st based on their ticketing information, 80 of those customers left. Like, customers will give you clues, right? You just need to pay attention to those clues. And sometimes as business owners and leaders, we're not always in the weeds all day.

[00:15:28] And maybe our CS people don't quite see the clue as clearly as we might. And so it's important that we look for those and flag those. All right. So now that's our warm one-to-one, right? We want to have direct conversations about specific solutions with specific customers based on their needs, whether that's one-to-one reaching out over a phone call, whether that's during the QBR. That is us in that very warm one-to-one mentality. Let's talk about warm one-to-many. I think there's a lot of opportunities here.

[00:15:55] It's the same audience, but maybe not a direct phone call, maybe not a direct outreach. And here's a couple of plays that you can run inside of that group there. So again, one-to-many means we're talking to all of our customers at once or a subset of our customers at once. So newsletter is kind of the obvious one, right? Now, what I see oftentimes is people will put all their products in their newsletter or a generic link in there. Highlight one service per month so that, again, the customers know what you're offering.

[00:16:23] Or if you're doing newsletters weekly, do one per week. Don't put them all in there. Like, the more confusion you create, the less likely you are to create opportunities. Highlight one product or service per episode or per newsletter. Invoices. Man, invoices are a missed opportunity to upsell products and make people aware of things. Again, putting something in the footer, putting something on it. I know, again, I'm going to be a Zoho guy. We use Zoho Books for our books. Like, it's so easy to go in there and add a byline.

[00:16:51] Hey, did you know we offer XYZ now with a link to XYZ? We also have an autoresponder on our customer support system. So we let people know, hey, you email support at guru.co. You get a ticket back that says, hey, we just, we got your message. We responded within two hours. Oh, by the way, have you gone to our knowledge base yet, right? For us, we were on a big play of trying to make sure people knew the knowledge base was there. So we've been pushing that for the last like 12 months. But now it's time to say, hey, look, are they aware we offer?

[00:17:19] We actually did just launch a new service. Are you aware we offer X now? Learn more here. And then you can have specific spotlight emails, one service, one ask. And then also, of course, doing educational events for your clients. What I love to do is these educational events, like instead of trying to push a ton of people there in the moment, like you want to ping your clients a couple of times, try to invite them to the live event. But then, you know, really put the video in front of them after the fact. And you can run some ads to it for cheap on YouTube to drive some new eyeballs to it as well,

[00:17:48] if it's a client that you want to offer to the market. So one to one, you've got all these different opportunities to go one to many. You've got the client newsletter. You've got the invoice, the autoresponder, spotlight email, client event. And look, you know, the math is going to vary based on whether you got 50, 500 or 5,000 clients. But again, if I'm looking in terms of like, I want a percentage of my new revenue to come from upsells. And I would say the smaller the book of clients, the smaller the percentage of my new booking should come from that.

[00:18:17] As you can see, as you hit scale, you're looking for more of a 50-50. You want to make sure that you're running both playbooks, a client upsell playbook and an outbound playbook. And I hope that was helpful in terms of an overview of how we can get in front of our client base a little bit more elegantly and offer them upsell opportunities. If you enjoyed that episode, please share it with someone else, you know, who might enjoy it and learn from this.

[00:18:42] And also, please rate us five stars on your favorite podcast player. We really appreciate you taking the time to listen. And also don't hesitate to reach out with other topics you'd like to hear more about. Thanks so much. Thanks.