 Digging
for Gold:
Mining your Existing Customers
By
Douglas Miller
President, Customer Care Specialists Inc.
Can you really
find revenue in your own back yard? The answer is as simple as looking
over the list of your existing customers. Your current customers would
not be doing business with you if they had not already found a reason to
purchase the products and services that you offer. So why not spend time
identifying why they buy and what can be done to grow their revenue
stream?
Choose to Be Different
Many companies believe that the path to profitability is achieved
through chasing new customers. They place great emphasis and the
majority of their sales and marketing dollars in the pursuit of new
customers. When you are starting out, this strategy is appropriate.
But as your business matures, your approach to managing it must change.
Customer acquisition must be balanced with customer retention and
growth. After all, there are countless competitors targeting your
customers. What is your team doing to ensure that you are continuing to
meet and exceed their needs?
Hunting and Farming
Acquiring a customer is just the beginning. Many companies "ring the
bell" to signify a sale and then quickly move on to hunt for the next
prospect. Little do they realize that the initial sale represents "the
tip of the iceberg" for the revenue that a customer can generate. So how
do you structure your organization to take full advantage of each
hard-earned customer?
Learn to be excellent farmers and understand all that your existing
customers can provide.
The Five R’s ™
We all learned the three R’s in elementary school. The Five R’s of the
business world are just as basic to the success of your venture.
Relationships – How well do you know your customers? Your organization
must spend time getting to know, understand, and build relationships
with your customers. Companies do business with people they like and
trust. If you want to increase your revenue stream, get to know them as
people and study and understand their business. Research their products
and services and determine why their customers do business with them.
Identify ways to make them successful and they will continue to beat a
path to your door.
Revenue Growth – Look closely at the products and services that you
currently provide your customers. If you provide services, there may be
other related capabilities that you can offer to enhance what you do.
Focus on products that complement your existing services. Sometimes it
can be as simple as asking your customers what else you can do to help
them and their business be more successful. If you have a strong
relationship (see point 1), this is an easy conversation and will lead
to increased business.
Referrals – You may have heard the statistics that a satisfied customer
tells four friends and one who is dissatisfied will tell nine friends.
Work to ensure that all your customers are satisfied, and make a point
to ask them for referrals. Your customers may sit on boards and have
friends and associates in influential positions. A well-placed comment
can lead to an opportunity for your next sale. Don’t be afraid to ask
your customers for contacts you can call.
Renewals – Ongoing business relationships are critical to the future.
The value of many businesses is based on the value of contracts that are
locked in. Whether your business has multi-year contracts or
non-renewing business relationships can be very important. Contracts
provide a long-term commitment to do business with your company. They
lock in a revenue stream, allow you to hire talented people, and make
investments to grow your business. If your business does not have
long-term contracts, consider ways to introduce them to your existing
customers. As an example, if they ask you for a discount, ask for a one-
or two-year commitment in return.
Receivables – This one is often overlooked, but it is amazing how many
businesses allow their receivables to get out of hand. Selling and
servicing your customers is key to their happiness and continued growth.
Collecting your hard-earned money is critical to your company’s future.
Ensure that your customers are staying current on their commitments to
your company.
Account Planning
Once each year, take time to review the status of your top accounts. At
a minimum, use the 80/20 rule and review the top 20% of your customers;
they most likely generate 80% of your revenue. Have the team members
responsible for those customers develop an account profile and a plan
that includes key contacts, the status of relationships, and significant
wins and losses over the past year. Perform a loss review to understand
why a competitor won business and take action to prevent that from
happening again. Most important, develop plans and goals for the
upcoming year. Be as specific as possible on opportunities and the
dollars and actions that are needed to secure the business. Identify the
key individuals and understand the relationships that need to be
fostered to win the business.
Inspect What You Expect
Develop metrics to measure your sales and support organization (e.g.,
sales dollars, new sales to existing customers, days sales
outstanding/DSO’s (accounts receivable), etc.). Track these on a weekly
and/or monthly basis to ensure that you are trending in the right
direction. Manage your team members based on their performance in
meeting these targets. If appropriate, link their rewards and
compensation to the results.
It’s All in the Execution
All the planning in the world cannot substitute for poor execution.
Determine what is right for your business. Structure your plan,
implement, and stay committed. Building relationships, developing
account plans and ensuring delivery on your commitments will result in
highly satisfied customers – customers who will gladly buy more of your
products and services and who will refer friends and business associates
to your company.
Customer
Care Specialists Inc. consults with small to mid-size companies to help
drive increased revenue from existing customers. The CCS team has
proven expertise in sales, customer service and general management.
Visit www.customercarespecialists.com for more information.
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