When you think about upping your turnover, what’s your first thought for a strategy? As likely as not it’s, ‘Attract more customers’. But what about the best customer base you could possibly have – your existing satisfied customers?
Research by the Chartered Institute of Marketing has shown that it costs substantially more to acquire a new customer than it does to sell to an existing customer (according to their various sources this ranges from 3 to 30 times more). So why do we continue to feel that new customers are somehow a better measure of success than retaining existing customers. Well, for one thing it’s easier to measure, and for another it makes us feel that we’ve sold ourselves and our product to someone new, so we get the ‘kudos’.
However this philosophy ignores one very important factor. The customer you already have has already been sufficiently convinced to buy from you and, provided your product and customer service was good enough, is likely to consider buying again. There’s an appreciable sector of customers out there who are reluctant to move as long as they’re satisfied. Not only that, but the type of customer who is constantly looking for a new supplier, especially if price is their sole or main criterion, is exactly the type of customer who is likely to move on again in search of novelty. So you not only have to spend more on attracting this customer in the first place, but you stand to make only a minimal number of sales before the customer moves on – and whilst he’s with you he’s likely to be a BMW (bitcher, moaner and whinger). Is this really the sort of customer you want?
So don’t knock the quality of loyalty but build on it. By which I mean not only rewarding your customers for their loyalty but utilising cross-selling techniques – sell more and more frequently to existing customers instead of seeking new customers. (Of course seek new customers as well, but don’t make this your only strategy!)
There are a number of ways in which you can achieve this, but the first rule is ‘Know Your Customer’. You have to know what the customer’s existing buying patterns are, what their hopes and aspirations may be, and what motivates them. Only then can you hope to offer them products and services that are likely to appeal to them and increase their purchasing.
In future blogs I’ll be looking at a few cross-selling strategies that you can use. In the meantime, do share with me any that have worked for you!