For Alex Moazed, President of Applico, a New York-based designing firm that creates custom smartphone applications and mobile websites, success isn’t just about making new sales. It’s also a matter of convincing existing customers to buy more. That is why he sets aside time during his quarterly reviews to discuss additional services with clients.
During recent discussions with a consumer packaged goods company, he suggested three new services. The client adopted two – doing more social media work and creating a mobile website – thereby increasing revenues from that company by 30 percent. “Boosting business from existing clients is a really important part of my plan for growth,” Moazed believes. “That’s just an easier sale to make.”
It’s a fact of business life: Winning new customers is a lot harder and costlier than up-selling to current clients. “In today’s climate, where it’s harder to carve out market share” declares Jeffrey Allen, a partner with Trendant, a Salt Lake City, Ut., consultancy specializing in helping companies boost revenues, “That’s more important than ever.”
Here’s how small businesses are increasing revenue among current clients:
This simply means selling additional products or services to existing customers. If you aren’t sure what they need, talk to your clients and find out what they are missing. And pay close attention to their comments.
Jason Hennessey, owner of Atlanta-based EverSpark Interactive, a search optimization company, heard clients complaining about their difficulty in turning visitors to their websites into customers. He started offering software to analyze web traffic, increasing average revenue per client by 35 percent.
You can also introduce maintenance programs, whereby you offer a flat fee for providing services. Through this tool you can create predictable revenue stream and create opportunities to make additional sales.
Offer Strategic Discounts.
You should offer price breaks in ways that will encourage further sales. For example, Allen recently worked with a toner supply company that tended to sell refills to customers every six weeks. To encourage accounts to buy more frequently, the business started contacting clients three weeks after each sale, offering discounts for purchases made over the next 10 days. Result: Most customers started reordering every four to five weeks.
Part of your efforts should include maintaining frequent contact with customers through email, phone or snail-mail, especially to communicate discounts. A few years ago, Sonny Ahuja, president of grandperfumes.com, an online seller of perfumes and colognes, started offering free shipping for purchases over $59. But, to boost revenues from existing clients, he sent out twice-weekly emails, offering discounts. What happened? Customers started ordering more than one item to get the free shipping, and revenues increased substantially.
Don’t Forget to Track the Numbers.
It’s imperative that you monitor key performance indicators, analyzing anything from cost per customer acquisition to percent of upsells. With that information, you can pinpoint where your weaknesses are.
“Painting a clear picture allows you to focus on the most productive steps to take,” says Allen. He points to a new-home construction company that recently started tracking their numbers, including how much they were bidding for projects. The company discovered that its asking prices were considerably lower than what their competitors wanted and started raising its bids. “They’d been underbidding by so much, they didn’t lose any clients and raised revenues by 25 percent,” says Allen.