Struggling to increase business sales? Do you know what is the most valuable asset your company has? Maximizing the returns from this asset can drive significant growth....in some instances as high as 100% to 200% increases in sales....
Your Most Valuable Asset
I would argue the most valuable asset of any small business is not a building, land or even intellectual property. Instead I would argue that the most valuable asset for a small business is a loyal and active customer base. In this article I will review why I believe this to be the most valuable asset of any small business and what business owners can do to maximize the returns from this great asset.
What Makes A Loyal And Active Customer Base A Small Businesses Greatest Asset?
1. It Is A Source Of Recurring Revenue
2. It Is An Easy Sell For Additional Products Or Service
3. Lower Sales Costs
4. Word Of Mouth Promotion And Referrals
Your existing customer base, if managed properly should be an source of continually additional revenue. Whether you sell an on going service or you sell products, this list of contacts should allow you to continually generate revenue. If you sell an on going service it is very clear how this works. If you sell a product you can create future revenue by launching new products and selling these to your past customers. Given they have already purchased from you, the ease of selling an updated or improved product will be much easier. In addition you can sell additional complimentary services or maintenance services for the product you sold. If you keep your customers happy they will continue to buy from you. The same holds true for service companies, if you are already selling a service to a customer it will become much easier to sell another service or product to that customer. Because you already have a relationship and interact with the customer, there are multiple opportunities for selling and the prospect will be much more willing to listen because they are already comfortable working with you.
For this same reason your sales costs will be much lower if you utilize your customer base when looking to grow sales. On average it costs 6 to 7 times more money to generate a new customer than maintain an existing one. By utilizing your existing customer base to increase sales you save money because the sales process is usually faster given you already know the prospect. There are also savings on administration, logistics and invoicing given you already deal with the customer. In addition the marketing costs are much lower as you can send marketing materials directly to your customers, which a very high percentage will be interested in what you are selling versus marketing to a target market where most companies will dismiss you given they don't know anything about you. When marketing to customers you can have an immediate impact where as when marketing to prospects you will usually need to convey a message to them about 7 times before it has any impact.
Finally your customer base can also generate great returns for your business by generating referrals for your business. Referrals are the number one source of new customers for small businesses. A referral is where someone either gives you a name of someone to follow up with who might be interested in your company or when someone makes an introduction about your company on your behalf to a contact of theirs. For example Customer A introducing their friend Jim to Profitworks and telling Jim that Profitworks is great at helping small business with marketing. Referrals are so powerful because we believe and trust advice from friends and people we know and trust. So when someone tells us a company can help us with X, we believe and buy from them. Your customer base is a great to way get these referrals and an excellent way to get these word of mouth referrals is to be continually marketing to your customer base so that you stay top of mind. The more times your customers come in contact with your brand the more likely they will be to remember you brand when someone is discussing what you sell. The other key to get them to refer you, is to make sure you provide a great service that they are eager to tell other people about.
How To Maximize The Returns From Your Most Valuable Asset
1. Ask For Referrals
2. Reward Customers Who Refer
3. Email Marketing
4. Text Message Marketing
The first way to maximize the returns from your customer base is to ask for referrals. This should be done at multiple points and in different ways. Some great ways to referral requests are after a sale is completed, on invoices, in customer feedback surveys and at the bottom of emails. If people know you appreciated referrals they will be more likely to give them to you. If you do get referrals from an existing client, you want to reinforce this good behavior so that they do more of it. Give them a great gift, send them a thank-you note or give them a discount on their next purchase. Do whatever you think that particular customer will appreciate the most. For some customers and simple phone call to thank them will do more than a gift, where as others will be flattered by a gift. You have to go on a case by case scenario.
Using email marketing to send out a newsletter or updates to your customers on a regular basis is a great way to entrench your brand in your customers mind. This is also a great opportunity to entrench in their mind why you are better than the competition. Because you can continually send them message on a regular basis it is very valuable. It can almost work as a "brainwashing" to get them to remember you, think about you often and remember why other people should use you. The same holds true for text message, except the messages are just shorter. With both because you are a supplier they will be open to receiving your messages. The key is to make sure in each message their is something in it for the reader, if it is just your marketing material, they will not read it, they will read it once and then never again.
Final, up-selling or cross-selling to your existing customer base is a great way to increase your sales. If you are not familiar with the terms up-selling or cross-selling check out our small business marketing terms dictionary. Again because your customers have already bought from you their barriers to buying will be much lower than someone who has bought from you. Therefore this gives you a great opportunity to sell your customers premium versions of things they have already bought from you or to sell other items or services you offer that they have just not purchased yet. Because you have all their contact information it makes it very easy to market to them. Using email marketing, text message marketing, event marketing or direct mail marketing are often great ways to up-selling or cross-selling to your existing customer base.
Just this past year in working with a specific client of mine by implementing only a few of the suggestion above we were able to increase his sales by roughly $100,000, which equated to a 33% increase in total sales. And that is in an industry that has been struggling. If you are not already taking actions to maximize the benefits received from your existing customer base I would highly recommend you put a plan in place and take action. If you do I think you will be very impressed by the results.
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My name is Chris R. Keller. I work at Profitworks Small Business Services helping various B2B small businesses in Waterloo and Kitchener Ontario generate new customers. Feel free to connect with me on Google+ or if you are just interested in getting new customers for your B2B small businesses enter your email in the box provided below and click the "Send Me Free Updates" button.
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I hope you have enjoyed this article on ways you can increase business sales by leveraging your most valuable asset. As always I love to feature guest posts on my blog. If you would like to write an article that is on a topic that is related to getting new customers, and have expertise to share, I would love to feature you. If you are interested just contact me and let me know what you would like to write on.