Discover more in the Best of OPEN Forum series

How to Squeeze More Business Out of an Existing Customer

Current customers may seem an easy mark for improving your cash flow, but there’s a fine line between upselling and pushing them away.
September 06, 2016

You may be tempted to try and wring a few more dollars from some loyal customers or clients, especially if your cash flow is low, or you're in a slow season. It's understandable. They've been there for you so many times before. Why can't they be there again? Plus, as you've often heard, it’s usually cheaper to retain a customer than find a new one.

But that's often easier said than done, and you don’t want to anger your favorite customers because you're coming on too strong. So if you're going to try to make a major client even more major—or pry more money from a loyal and devoted cadre of customers—try the following advice.

Build Relationships

This may be important whether you have a small core of clients or a wave of customers that you rarely meet. Anne Janzer, a San Francisco-based marketing consultant and author of Subscription Marketing, says subscription businesses—think Netflix—are particularly good at building and keeping relationships with their customers.

You have to balance the need to drive revenue with creating customer goodwill. You don't want customers to feel nickel and dimed.

—Dan Gotte, principal, Fuse Financial Partners

Small-business owners can do the same in fairly simple ways, "like providing great content [in newsletters or on websites], creating community around their offerings and making the customer relationships fun and rewarding," Janzer says. "Those who do so tend to increase revenues from existing customers."

What if you run a consulting business with five to 10 clients? While you may or may not feel it's worth it to offer up a clever and quip-filled newsletter or insightful blog to foster a relationship with all eight of your clients, that's where making time for small talk with your customers may become really important.

You may never become friends, but you may want to be friendly, and be on the hunt for problems your client has that you may be able to solve.

"Listen to their needs," advises Tim Nguyen, CEO of BeSmartee, a website that helps people find home loans. "[You should] truly want to help them achieve and not simply [want to] make a sale."

Listening to your clients may not win you more business every time, but it may foster a stronger alliance with your client. It may even give you an idea for a new service you can provide. Nguyen explains that when he was working on another business he co-founded, he was always listening to his customers—and it was while listening to one of them in particular that he came up with the idea to create BeSmartee.

"It takes consistency," Nguyen says of listening to your client base. "One thing I do is simply answer every email and take every call. No one gets left behind. Even if you're a salesperson emailing me for a deal, I will get back to you. I'll listen and learn, and when I reject [the deal], I will let you know why and keep the channels open. It's good business, but also respectful. Opportunities are everywhere if you just listen."

Study Your Customers

Sift through any available numbers and information that may offer you extra insight on who your repeat customers are.

"Business owners should analyze their sales data, identify their repeat purchasers and try to find patterns in what is unique about them," says Skyler Slade, co-founder and CTO of Tandem, an Orlando-based business that creates market research and analytics software. "This is quantitative analysis, and you can do this using a variety of tools, including Excel."

If you still feel like you lack the necessary information to understand your customer, Slade suggests surveying your repeat customers to learn more about them.

"Why did they choose to buy from you? Why did they repurchase? Through this kind of research, you can discover the characteristics of your customers. Find out what motivated them to complete a purchase, and why they chose your brand over another," he says.

By doing that, you won't find clues to keeping your repeat customers—you may start to figure out how to make the new ones come back as well, Slade says. "You can then reach out to your one-time customers and offer them the same deal that convinced your repeat customers to buy again."

Offer Perks 

If anyone deserves special treatment, isn't it the client or patron who keeps coming back to you again and again? If you roll out the red carpet for the new customers, make sure it stays out for your established ones, too.

"Many companies make the mistake of only offering steep discounts to new customers," says Corey Barnett, who owns Cleverly Engaged Marketing in Texas. Barnett suggests offering those discounts to your regulars, especially if they bundle services, use your services frequently or refer new customers to your business.

Stay in Touch

You may wonder where your clients, advertisers, customers or any other revenue-making partners are, but maybe they just need to be reminded that you're still around, working hard and hoping to help them in any way that you can.

"My strategy for getting more revenue out of existing clients is to send out periodic follow-up emails every two months," says Manisha Kaura, CEO of Dermetel, a nonprofit advancing awareness about skin cancer and dermatologic, infectious diseases.

Don't Overdo It

You may come on too strong if you're trying to generate more income from your existing client base by, say, raising prices or offering add-on services that aren't all that meaningful.

"The key word is 'valuable,'" stresses Dan Gotte, a business consultant and principal with Fuse Financial Partners in Charlotte, North Carolina. "You have to balance the need to drive revenue with creating customer goodwill. You don't want customers to feel nickel and dimed."

You also don't want to scare potential customers or clients away, which may be easy to do if you have a smaller client list, and especially if some of those clients are relatively new.

"Build the relationship and the trust first before you try to get more business from your existing clients," says Michelle Messenger Garrett, who owns Garrett Public Relations in Worthington, Ohio. "Talking about this too soon can kill not only the possibility of gaining additional business, but can also kill the existing business you have."

That may run counter to your instincts if your business is going through a rough patch and you want to convince your client to work with you a little more. But remember, if the person hiring you senses your desperation, you probably aren't going to inspire much confidence.

"If they sense they can trust you, and you listen over time and learn their pain points, then you might be able to start that conversation when the time is right," Garrett says. "Follow the see-a-need, fill-a-need type of mentality, once the trust is there."

So keep squeezing your toothpaste. Eventually, you'll toss it out. But squeeze a loyal customer too hard, and they may throw you away.

Read more articles on customer engagement.

 

For more tips on planning for business growth, access our exclusive guide from LegalZoom CEO John Suh, Move Your Business Forward.

 

A version of this article was originally published on August 10, 2015.

Photo: iStock