Are your sales and marketing efforts focused on attracting new customers? If so, you’re not alone.
In a recent study, four out of five businesses surveyed said they planned to increase spending on customer acquisition in the next year, while just two out of five planned to spend more on customer retention.
But if you focus on customer acquisition at the expense of retention, you’re missing out on one of the easiest ways to grow sales: by selling more to existing customers.
Increasing customer retention by just 5 percent can generate 25 percent more profit, according to Bain & Company.
How can you increase sales to existing customers? Follow these steps.
Take initiative, instead of waiting for customers to place bigger orders or ask for new products. First, identify your most valuable customers by calculating their customer lifetime value.
By focusing on selling more to customers with the highest lifetime value, you get quick wins that deliver ROI.
What if there’s an opportunity to sell more to your existing customers that are outside your core competency?
Depending on the long-term potential of the opportunity, it may be worth revamping your business model to take advantage of it. For example, you might want to add a new product.
Identify opportunities to sell more to these customers:
- Upselling and cross-selling: Can you convince a customer who buys Product A from you to purchase add-on Product A-1 too? Or can you also cross-sell related Products B and C?
- New sales/distribution channels: Adding new sales and distribution channels can increase sales. For example, maybe your customers prefer to buy from you online, instead of going through a salesperson.
- Adding value: Think of ways you can add value to your products so you can charge more for them? For instance, can you offer faster delivery, upgrade product quality, or offer training or warranties for the products you sell?
Learn from your competitors
How does your competition sell more to their customers? Pay attention to what they offer that you could add, or what they don’t sell that you could.
Consider small or startup companies that do things differently; these “disruptors” often transform entire industries.
Watching what they do can give you ideas about how you can enhance your business to increase sales to your customers.
Consider a different approach. What if acquiring a competing or complementary business, or forming a strategic partnership, will help deliver more and better products to your existing customers?
It is important that you keep an open mind and constantly look for opportunities.
Know your customer
Knowing your customer is very important when it comes to increasing sales.
Put yourself in the customer’s shoes. From their perspective:
- What can your business do to better serve them?
- What do their customers want, and how can you help provide it?
Collect customer feedback through customer surveys, customer focus groups, and by talking to customers one-on-one.
Educate them about what you offer and how you can help them achieve their business goals. Staying engaged with customers also keeps your business top-of-mind the next time they need what you sell.
According to Constellation Research, companies that improve customer engagement increase cross-sell by 22 percent, up-sell by 13 to 51 percent, and order sizes from 5 to 85 percent.
Salespeople must take time to learn as much as possible about your current customers’ growth plans, priorities, and needs. The more insights your salespeople have about your customers, the better they can address their needs.
Take advantage of social networking to connect with people at your customers’ companies. By expanding your circle to decision-makers beyond your current contact, you have a good shot at expanding your sales opportunities, too.
You never know when another department at a client company may need something you sell.
Above all, work to maintain strong customer relationships. While growing an account may be important, don’t neglect to service it as well. If your standards slip, you may disappoint a key customer, therefore hurting your chances of increasing sales.
To help ensure continued quality, be prepared to invest in customer service.
Create an action plan
Every business owner wants to increase sales to existing customers, but you can’t wait for those sales to fall into your lap. Have a strategic approach and create an action plan.
Create a timeline and set measurable goals for increasing sales to existing customers. There should be a strategy around everything from creating demand through marketing, to maintaining a client relationship.
Monitor progress on an ongoing basis and hold your team accountable for reaching growth goals.
By taking a pragmatic approach to boosting sales to existing customers, you’ll not only grow your business but also build lasting customer relationships.