When it comes to growing a business, most people look to bringing in new clients, landing a major contract or getting a new sale. What about your focus on existing customers?
Your existing customers are your most probable (and most times the most profitable) source of new business. More often than not, most businesses don’t take advantage of this resource for growing their business and profits.
When you look at a company, most will have a sales department, with lots of measurements surrounding new business gained. When a new client joins a company, there is usually some celebration, and the feeling that the company is on track to more growth.
However, what about your existing clients and customers? When was the last time you really mined your database for new business opportunities? Getting leads in your business will be one of the more expensive ways to grow your business. Marketing is an essential part of your company’s growth. In fact, a real indication of the health of an organization is repeat transactions and referral.
If you have a company, where customers buy from you often and rave about what you do, your business will thrive and grow – with smaller dependence on new sales.
Do you know how many times on average someone will buy from you in their lifetime with you? Do you know on average, what the average transaction value of a customer's relationship with your company is? Do you know the likelihood of a customer referring business your way?
It has been said many times in business, what you don’t measure, won’t change. Imagine if your business placed as much importance on measurements like Number of Transactions, Average Dollar Sale Per Client and Number of Referrals Per Customer as it does new business? What would happen to your business as a result?
Why you should always look inwards, before outwards, when marketing …
Marketing can be expensive. If you cannot say with 100% certainty, that if I invest $X in marketing, I will get Y amount of new business – then you may want to tighten up your sales and marketing processes before starting any new campaigns.
Really analyzing what happens to a lead when it enters your sales pipeline, will help with fixing some conversion gaps you may have. You may find that a salesperson has developed a unique sales process that helps with conversion. You might find that one part of the sales process is redundant. This careful analysis will take time, however while you are doing that, I would hazard a guess that you will have some business development opportunity available within your own database.
How often do you speak with your database, both passively and actively?
Passive tactics are promoted to the entire database with little to no personalization. Marketing tactics like e-newsletters, email drip campaigns and social media updates, are what I call passive marketing. They are built to keep your brand top of mind.
Active communication is more personalized. For example, it could be call-cycling or up-sell campaigns. They take into account the last purchase, or information contained in the database, and highly personalizes the communication with the concept of inviting them to re-engage with the brand, usually through purchase.
A big role of marketing is to establish trust. People do business with those they know, like and trust. With existing customers, they already know you (and, if you have been doing a great job, like and trust you as well). They represent a higher-probability of buying again. You know they bought your product in the past, and may be open to purchasing again, referring or purchasing for a friend.
Another great reason to market to your existing database, is because the cost (in most situations) is lower than acquiring a new client.
How do you get more business from existing customers?
First of all, you need something that they want to buy. It might be a product or service they have bought before, one they will be willing to buy again or buy for someone else. In these instances it is a matter of communicating to the database of customers, reminding them, it is time to buy again or incentivizing them to buy again now versus later. If you have a database that keeps track of purchase date, you might want to remind them it has been X months since they last purchased. Alternatively, you might want to remind them that your widget makes a great gift for the holidays. You may have a product or service, they may not know about – which is a natural “upgrade”.
To encourage more referrals, you might want to develop a simple referral program – in which you reward your client for referring business your way. You may want to allow your better clients to refer a friend in return for something they value for free, or offer a referral discount. Sometimes, the best referrals are simply asking for a referral (and if you get one, to reward your client unexpectedly for their loyalty with a highly personalized gift that will have them raving again about your company).
Start with a very simple plan (like the one above), with a handful of tactics to implement, focused on your Top 20% of customers. You may categorize your clients differently, however typically these would be the clients who make you the most profit.
New business development for most businesses is the single key to overall growth. As a result many business owners are riding a rollercoaster of ups and downs when it comes to growth and cashflow. If you are not looking at your existing database as a potential gold mine for new business, you are leaving money on the table.
For your 2021 business plan, make sure you include strategies and tactics that increase loyalty, average transaction and referral. Your business will only prosper as a result.