It’s up to seven times cheaper to keep an existing customer than to acquire a new one.
You may or may not know that it’s up to seven times cheaper to keep an existing customer than to acquire a new one. This fact alone places customer retention high on the agenda for many in the ultra-competitive cleaning industry, particularly small (and often specialized) suppliers who rely on long-standing customer relationships.
However, smaller suppliers face a big problem. Huge ‘big box’ merchandisers and e-commerce companies are eager to expand into the market, vying with specialized product suppliers for a slice of the pie – one worth in excess of $23 billion. How can smaller suppliers hope to keep up with the big boys?
The situation is complex, but one thing is for sure: smaller suppliers must start by adding more value to their relationships with their existing clientele.
Boosting Customer Value
The key to profitable customer retention is the ability to upsell effectively to the people who already buy from you. Rather than offering faithful customers the same old deal on products, sales teams should be actively looking to increase their spend. It sounds simple enough, but according to research by sales-i, this is something almost a quarter of salespeople struggle with.
There are several possible reasons for this. You might lack insight into your customer’s buying habits, have your wires crossed when it comes to communication, or struggle to find time to develop an intelligent, targeted sales strategy. Most likely, it’s a combination of the above.
Rather than attempt to fix these problems, sales professionals appear to be shifting their focus to acquisition as opposed to retention and upselling. Research has shown that 44% of companies spend the most time on acquiring new customers, while only 18% focus on nurturing the ones they already have.
In doing this, these companies miss out on the valuable opportunity that lies in upselling to their existing customers. Don’t make this mistake. With the help of the right technology, effective upselling is completely possible.
The Tech Advantage
The majority of businesses now collect large amounts of data on a daily basis. Email programs document customer interactions and electronic payments systems keep records of purchases made. Similarly, electronic diaries save your meeting history, while modern telephone systems save call logs, enabling you to track exactly who you had contact with.
Your business is constantly collecting data, but if it isn’t consolidated and interpreted, it’s not worth much. This information, when factored in to your wider sales methodology, has the potential to help you significantly increase your upselling potential.
Data analysis can help you see how your customer interactions influenced purchasing behavior in the past, giving you an indication of what you can do to prompt them to buy more from you now.
Intuitive software will help you turn this insight into action by sending alerts around the time that customers typically buy from you, allowing you to contact them in advance. This is important when we consider that, according to Forrester, buyers are between 60% and 90% finished with the buying process before they even engage with salespeople. To really boost your sales volumes, you must pre-empt customer needs and contact them with a suitable offer at the appropriate time.
Upselling to your existing customers does not have to be an uphill struggle. By using the information available to you, you can boost your sales volumes without the added cost of acquiring new customers. Your most valuable customers could already be in your database. Don’t miss out on this opportunity.
Paul Black is the co-founder and CEO of sales-i, a pioneering SaaS business focused on service architecture and delivery. Paul is responsible for the marketing proposition and technical delivery of the sales-i service.