Selling more to existing customers is a great way to grow your business. Think about it: you don’t have to spend time and money identifying and convincing new prospects, because they know you and you know them! So, your marketing costs can be lower—which is great for profitability and cash flow—and you probably already know a lot their preferences. You know what they’ve bought before, and you have a relationship to build on. All this can make selling to new customers far easier than starting from scratch.
But here’s the challenge. Growing revenue from existing customers requires focus, process and discipline.
Know More to Sell More
Start by making sure you know all you can about your current customers. The gold standard way to do that is in person, so it’s a good idea to reach out personally to as many of them as possible. What has been their experience of working with your company, and using your products and services? Do their views of you match what you expect them to say? If not, what can you do to improve their customer experience? Was there a problem you didn’t know about?
Of course, if that conversation reveals that a customer unconditionally loves your company, it’s time to ask for referrals to friends or colleagues. Did they compliment a specific employee? That’s an opportunity to reward your staffer and build employee loyalty.
Ask your customers how their needs are changing. What new products or services would they like you to offer? What would make it easier for them to do business with you? For example, would they like new payment options, such as mobile wallets? If you sell B2B, what’s new in your customers’ businesses?
Often, the most profitable route to growth—and improved cash flow—is increasing sales to existing customers.
Consider briefing yourself on your customers before speaking with them. How has a customer’s buying patterns changed? For example, has she stopped buying from you recently? Does anyone in your company know why? Has your customer started to buy more or different products? Might this signal a change in their needs? For example, if she’s moved up to your top-of-the-line product, she might need something even more capable that you don’t offer yet. If he’s moved down to less-frequent purchases or a no-frills product, does that signal cost-cutting or cash flow concerns? Or does it mean your higher-end product wasn’t delivering sufficient value, and needs to be improved or repriced?
If you don’t have easy access to comprehensive customer information, now may be the time to invest in a modern customer relationship management (CRM) system. Today’s cloud-based subscription solutions don’t require costly upfront investments in computers or software (so they usually don’t drain cash flow). You might also be able to get the insights you need from the customer data already stored by your accounting software.
As you reach out individually, focus on understanding value as your customer sees it, not as you see it. You might be very proud of an element of your business that customers just don’t value at all. If you discover this, you can make better decisions about pricing and competitive positioning. More broadly, this can help you capture more objective insight into customer satisfaction.
Strengthening Your Offerings and Value Propositions
The more you know about individual customers, the more sales you can make in the next quarter, and the better you can serve them in the coming years. For example, you can:
- Systematically identify add-on or complementary sales based on what a customer already purchases, along with specific ideas for how the additional purchase will benefit the customer. As you discover patterns in what customers buy together, you can use those insights to cross-sell more successfully to existing and new customers alike, further boosting cash flow and profitability.
- Begin offering tips for getting more benefits from what your customers are already buying, to add value and position yourself as a valued partner, not just a vendor. (If you’re selling B2B, this can involve helping customers enhance their own operations.)
- Consider adding related services offerings or creating product/service bundles that encourage additional purchases.
- Craft a meaningful frequent buyer program, VIP service level, or customer rewards, incentivizing regular customers to give you a higher share of wallet.
- Discover how they prefer to hear from you, so you don’t waste resources on ineffective communication channels.
Think strategically as well as tactically about what you learn from your customers. For example, you might discover that many of them are purchasing your product along with a different offering from another local company. Perhaps you should acquire that firm or otherwise partner with it, to bring both offerings under the same roof, continue developing them together, and gain economies of scale.
Not Just Once: Continually
Focusing on existing customers isn’t something you do just once. Maximizing opportunity from existing customers typically means building systematic processes for assessing customer relationships regularly (via data and other means), reaching out regularly, and continually embedding what you learn into what you do. No less than your other prospecting and sales programs, your customer growth program should include schedules, measurements, accountability and ongoing adjustments to reflect your experience.
It’s worth the effort. You can achieve higher and more profitable sales, better cash flow—and greater customer loyalty for when new competitors or economic downturns arrive.
Often, the most profitable route to growth—and improved cash flow—is increasing sales to existing customers. You can do that by systematically deepening your understanding of them, and acting on what you learn, delivering more of what they value and less of what they don’t.
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