No doubt, every small business desires a constant inflow of valuable, consuming customers. While this is great for business success, it also keeps most business executives running a never-ending race. Olatunde Adedeji, founder of Biocence, a digital marketing company, and contributor to Sales POP, notes that as a small business owner, maintaining a steady cash flow was most important. He thought the only way to remain in business was to constantly gain new customers. His team spent a great deal of time developing strategy on acquiring more customers than managing their existing ones.
At a point, they had discovered they lost more than 28 percent of existing customers due to poor customer retention strategy. They were losing at a higher rate than they were gaining new clients. They also thought customer management solutions were the exclusive right of big enterprise. Many salespeople make this wrong assumption; that more paying customers equal higher revenues.
The above assertion is not necessarily true. As a matter of fact, smart businesses don’t chase new customers at the expense of keeping existing customers. There is a popular held belief that it is 5-6 times more expensive to sell to new customers than existing ones.
According to Gartner Group, 80% of future revenue will come from just 20% of your existing clients. The low hanging fruits are easier to pick. More than ever before, customer relationship management is critical to the continued survival of any business.
Customer Relationship Management (CRM) solutions are an approach businesses use to manage interactions with current and future customers. It often involves using technology to organize, automate and synchronize sales, marketing, customer service and technical support. Simply put, it is a holistic solution suite to get the customer to move through your sales cycle again and again. Sweet repeat sales come from satisfied existing customers.
CRM and other analytics have opened our eyes to the importance of valuable customer data for increasing profitability. What a CRM can do is enable you are to navigate through the complexity of consumer behaviors and their ever-changing needs. Your marketing and sales team will be constantly a step ahead of consumers’ needs with the right solutions.
There are three possible ways you can increase your business revenue with a CRM:
- Sustained Communications
- Up-sell and Cross-Sell Strategy
- Leverage on Customer Purchases and Promotion History
This might sound too obvious, but “out of sight is out of mind.” The longer you neglect communicating with your existing customers, the less likely they will buy from you. CRM helps to sustain your business relationship with your customers in a way that keeps them coming back for your products and services. With your customers’ details at your disposal, you are able to maintain relationships and provide useful information, and they respond with repeat purchases.
Up-sell and Cross-Sell Strategy
Most e-commerce platforms are pretty good at product recommendations based on our previous purchases or interests. With your CRM harboring useful information about your existing customers and prospects, you can employ this sales strategy.
Up-sell is when salesperson is trying to sell complementary products or services at higher value and cost. While in cross-selling, a salesperson is persuading customers to spend more money by buying additional products from other categories. For instance, a shoe polish could be cross-sold to a customer buying pairs of shoes.
The primary aim of up-sell and cross-sell is to make more revenue. Availability of CRM data makes this easier.
Leverage on Customer Purchases and Promotion History
Deeper knowledge of your customers buying history is a powerful insight into how they might buy from you in the future. Their purchase frequency and other spending habits can help you in the kind of sales promotions you develop for them. A customer who has purchased a similar product to the one currently in promotion will be more likely to order than a customer who has never purchased a similar product before.
In conclusion, gaining new customers and managing relationships with existing customers to drive more revenues should go tightly hand-in-hand. When you are at a crossroad as to which one should take more of your organization’s resources, keep in mind it is easier to sell to a satisfied customer than a new prospect.
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