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Whether your business is large or small you want new customers, right? But if you fixate on that goal you might miss the opportunities already in front of you with your current customers.
In fact, best-selling business author Paul B. Brown says existing customers are the ones to focus on first. He says, “Once you have sold all you can to your existing customers, you can start reaching out to gain more.”
Brown points out that it’s easier to sell to people who already know your business, and you can do the following with them:
- Make bigger sales each time
- Sell them additional products and services
- Increase how often they buy from you
Maybe you can do all three, but accomplishing any of the goals above can add substantially to your bottom line.
And there is a cost factor in sales. Brown notes that “it costs far more to gain a new customer than to keep an existing one.” So, while marketing can bring new people through that door and provide a great return on investment, don’t let those efforts replace paying attention to the customers you already have.
After all, who doesn’t want easier, cheaper sales? That’s what you’ll get with these ten ways to make more profit from your existing customers.
1. Upsell Them
When I was a carpet cleaner you can bet we asked customers if they wanted more than just a regular cleaning. Specifically they were asked if they wanted a stain repellant treatment applied to their carpet. There is almost always something else to sell.
For another example; who buys only a car? Everyone wants at least a radio, and usually a few other options as well. Almost nobody walks out of a dealership paying base price.
Whether you sell a product or a service, you should always have an upgrade option or two, and you should offer them to every customer, every time. Some of them will say yes.
2. Cross-Sell Them
“Would you like fries or a drink with that?” It’s a question asked at almost every fast food place in the world, because it generates additional revenue.
It just makes sense to sell other things to a customer while they’re standing there in front of you. If you sell books you might suggest other books by the same author. If you’re a plumber fixing a leak you should be looking for anything else that needs to be done.
What if you have nothing to cross-sell? Find something!
3. Consider Their Lifetime Value
Retaining your customers can mean years of additional profits. Of course you already treat your customers well, right? And that’s a good start, but it also makes sense to treat your best customers really well.
For example, bicycle dealer Chris Zane’s perspective on lifetime value led him to give a customer a free bike pump for his worn out one. He figured a guy who wears out a high-end tire pump ($60) should be kept happy. He also figured that this simple $30 investment (his cost for the pump) would help him retain a customer whose lifetime value was hundreds of dollars in future profits.
Remember that if you lose a customer on a sale that would have made you a $10 profit, you don’t lose just $10. You potentially lose $10 multiplied by every future visit that customer would have made, which could be hundreds of dollars. And you make those hundreds of dollars by not losing that customer in the first place.
4. Educate Your Customers
Sometimes customers don’t know enough to realize they need what you sell. And no, that’s not a suggestion that you bamboozle anybody. There are things customers really should know.
For example, I didn’t realize that our air conditioner warranty (which still had three years to go) would be invalidated if we didn’t get an annual inspection and tune-up. How did I learn this? From the guy working on the air conditioner, of course, and yes, after that bit of education I did call the company back the next year.
Make a list of things that customers should know. Then make sure you, or your employees, educate them. Pamphlets, websites, and videos work well for this purpose as well.
5. Make And Use A Customer List
When our websites were doing well I could make a few hundred dollars selling advertising by simply spending an hour contacting previous advertisers to see if they needed any new placements. Of course I could only do this because I had a file with all of their email addresses and details of the past purchases.
A customer list is valuable, to say the least.
Even if you have a business that doesn’t usually require taking the names or addresses of customers, why not find a reason to collect this information anyhow?
For example, create a helpful newsletter customers can subscribe to, or have a contest that requires them to sign up for your mailing list. Find some way to get contact information.
Then, once you have a customer list, schedule regular mailings (or phone calls) with offers that will generate additional sales. Just don’t overdo it or you might chase customers away.
6. Help Your Customers Sell More
If sell to other businesses you know they all want to sell more too, right? So why not look for ways to help them with that goal?
For example, if they’re not direct competitors you can exchange marketing materials to pass out. You can help promote their business and they can help promote yours.
Also, if there is any way in which your product or service can help your customers’ sales, be sure to emphasize that and try to enhance the effect somehow.
For example, if you own a painting business, you might research how colors affect consumers decision to buy, so you can offer customers a way (the right color scheme) to increase sales. If you sell point-of-sale systems, identify the products that help process orders the fastest, so your customers doing high-volume can sell more per hour.
Find some way to help your clients increase their sales, and they’ll not only be happy with you, but also likely to keep doing business with you.
7. Use Special Offers
My wife and I eat at Sweet Tomatoes regularly, and because we’re on their mailing list we get coupons from them. The problem with coupons is that, while they bring in new customers, with regular customers (like my wife and I) they can mean giving away part of the profit on a sale they would have made anyhow.
So why would you specifically target existing customers with coupons, sales, or other special offers? It’s all about increasing sales frequency.
The coupons we get expire just a week after we get them, so we have to use them soon. Do we eat there more often as a result? You bet! And because of the additional profit from the “extra” sales Sweet Tomatoes can afford to give us those coupons, even if we use them on a few visits we would have made anyhow.
Make your existing customers feel special with offers just for them, ones that increase how often they buy your products or services.
8. Remind Customers Of Your Products And Services
The coupon example above is really about reminding customers you exist (the coupons we get are only for $1 or $2 off after all). But be sure to also remind your customers about all of the various products and services you offer. Don’t assume they know everything about your business.
Coupons are not the only ways to remind people you exist. Among your many options there are greeting cards, sale flyers, and informational emails.
9. Ask Customers What They Want
Vegetarians order pizza without meat, but sometimes they or their vegan partners would prefer to avoid all animal products, so one of our local Pizza places recently started making vegan pizzas. It’s pretty much as simple as leaving the cheese off and adding a few extra vegetables.
Did the pizzeria make extra sales as a result? Probably, but here’s the more important point: Had the owner asked enough regular customers about their needs sooner he might have increased his sales years earlier.
Sometimes small business owners focus only on trying to sell what they already have rather than what customers want. Maybe you can’t provide everything your customers want. Or maybe you can. You won’t know if you’re missing a new profit center unless you ask.
10. Reduce Customer-Related Expenses
You can only go so far with reducing expenses as a way to increase profits, but if you haven’t reached that limit this is a great place to start. You see, expense-reduction measures often cost little-to-nothing to implement, and so they can produce 100 percent profits.
For example, if you own a cafe and get your employees to hand out one napkin instead of three (unless the customer asks for more), the money you save all goes to the bottom line.
Another example of cutting customer-related costs is when pizza places have specials that are “pick-up only.” This saves fifteen minutes of labor and driver mileage reimbursement. A pizza sold for less but picked up by the customer might provide a bigger profit.
Look at any costs related to selling to your existing customers and brainstorm ways to reduce them.
Putting It All Together
You could do pretty well by accomplishing any of the above. Creating and using a customer list (number 5), for example, might add 10% or more to your sales, and even more to the bottom line (since these sales cost less than new ones).
But to really boost those profits, try to do something with as many of the above suggestions as possible. Put five or six of them into action and you might double your bottom line even without a single new customer (of course, then you might want to go find those new customers).
If you can add to this list of ways to increase profits from your customers, please share … and keep on frugaling!