How to Increase Sales from Existing Customers

You've all heard about the lifetime value of customers but what you may not know is that your existing customers' value is far more than just their sales value. Existing customers are, in fact, more profitable than new ones.  

No-one would argue with the proposition that business begins with the sale, but which sale and to whom can be important.  The wrong sale can cost you profits either directly or as an opportunity cost, where the same sale elsewhere might have made you a higher profit.

With new customers you need to establish your expertise, credibility and trust. It costs money to acquire new customers and to set them in your system, and then new customers tend to buy in smaller amounts. 

There are three good reasons why is important to concentrate on existing customers. 

• Existing customers cost less and are easier to service.
• Because they trust you they are likely to buy more often, and to buy more expensive products or services.
• If they become raving fans they are more likely to refer others to you.

The benefits of intentionally focusing most of your selling and marketing efforts on your current customers are: lower costs for additional sales, greater customer loyalty, higher customer satisfaction scores, and more profits.

If you keep the same number of customers but increase the size of their orders, you will increase your revenue.  And you do so without reducing your margins, you will increase your profits.

Or if you keep the same number of customers and the size of their order is constant, but youupersuade them to consume more, revenue will increase.

Let's work through three ways you might do this in your business.

1.   Building on the ideal customer

• Take a market segment you service - for example, professionals. Can you narrow it down to, say, lawyers.

• Look at your best legal client and analyse the products or services you sell them, the volumes, values and timing.

• Repeat with the other legal firms you service.

• Adjust for the comparative size of each firm. If you don't know their size the number of employees will give a good indication.

• Look at the gap between the sales to your best client and each of the others. That is your potential gain.

• Brainstorm with your team what you know about each business. You will be surprised at the cumulative knowledge in your business.

• Develop a targeted proposal and approach for each client.

2.    Leverage off the usage cycle of your product or service

 It works like this:

• Many products or services have usage cycles or maintenance intervals. Think of a regular check up with your dentist.

3.   Staying in communication, developing and building the relationship. 

You can't have a relationship with new customers.  You can with existing customers, and that gives you the ability to maintain regular contact and offer targeted specials.

So at the end of the month where are you?  You don't have to chase a raft of new customers for payment, you have no more companies on your list but your return per sales call has gone up, your sales have gone up, and, more importantly, so have your profits. 

Through practical experience you have found that it is far easier, and more profitable, to sell to existing customers.  Another profit leak has been plugged.

Source:   Adam Gordon  www.profitsleakdetective.com

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