Want More Profitable Business?
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- Manage the activity
- A Tale of Two Campsites
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- Preparing to interview a candidate?
- Drowning in Data
- E-Myth Revisited, best book ever written
- Are you Proactive or Reactive?
- What Business Are You In?
- Have you ever paddled on moving water?
Ask almost any manager what they’re focusing on to grow their business and chances are they’ll say getting more customers. We all seem to be obsessed with this endless hunt for fresh customers.
Try Farming As well as Hunting
Often this is the prime focus of attention and marketing for new prospects is usually one of the biggest expenses as everyone looks outwards searching for fresh customers.
And yet if you stop and look at the figures you might see a different picture. For most established businesses the majority of the profit actually comes from repeat business with existing customers. These are people that already know you; presumably they like the quality of your work and they trust you with their business. You don’t need to spend money convincing them, they already know – there is no acquisition cost!
Wouldn’t it make sense to put some management focus into getting more of this kind of business?
Here is a simple exercise you can do to help you get more profitable business from your existing customers:
1. Draw a table – 6×6 grid.
2. Put the names of your top 5 products or services in the headings of the last 5 columns
3. Put the names of your top 5 customers in the left hand column of the last 5 rows.
4. Put a tick or a cross in main body of the table for each product or service that these customers have bought in the last 6 months.
5. Review the grid and develop a plan for filling in any gaps
We call this an Opportunity Grid – every gap is an opportunity to sell something new to an existing customer. These extra sales are likely to be the most profitable business you do as there should be no acquisition or marketing cost involved – they already know and trust you, so you don’t have to overcome that hurdle; you just need to explain the benefits of whatever they are currently missing out on.
Example, one VERT member recently started emailing past clients to let them know about upcoming offers across her whole range of services, not just the one’s they’d bought in the past. In the first month she generated an extra £1,000 of extra PROFIT for the cost of sending a few emails. How easy is that?
So, start devoting your time and farming the clients you already have.