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“Customer retention is the key here everyone. Keep retaining your customers and keep selling more and more to them.
“0% of your customers account for 80% off your sales…so why do companies focus so much on acquiring new customers?
Yes you always need knew customers but surely reading the above statement, don’t you feel retention of your customers is more effective?
Keep your customers happy, and sell more and more to them. You’ve already done the hard part, you’ve already acquired them! Now sell more and more to them through cross selling and up selling.
Customer relationship marketing is the key thing here. The more companies, especially the smaller ones realize this, the more money will be made :)”
I could not have explained that better myself.
Previous customers are a rich ground of extra business. Finding new customers is always a harder road in which to make money. The job of selling to previous customers is much easier as you have already laid the foundations the first time you sold to them. Plus, it is much easier to upsell to a customer that had used you previously.
There are lots of companies focussed on growth by obtaining new customers. Lots overlook the already established large previous customer base they may have as an opportunity to grow.
>Yeah, if you want to tick over then looking after your existing customer base is vital. But, what Dan fails to understand is the nature of our industry. We sell a conservatory to a customer once, normally. And, we sell windows and doors that should last 25 years. So, absolutely, look after your customers and some will come back, and you'll get a steady stream of recommendations. But, to grow your business you have to advertise. I've never witnessed any company in our industry who has grown successfully, by concentrating on this strategy. You need to do both, or stand… Read more »
>I couldn't agree more with RCG. The existing customers model works well for supermarkets and stockbrokers and restaurants – even car salesmen – but not so well for our industry. Frankly the repeat-sale opportunities for most retail customers is pretty limited. They might have a few extra windows that need doing, if you've done their conservatory they might want windows at a later date, they might move house and need new windows again. None of that should be overlooked, but I doubt there are many businesses who could survive if this was their primary source of work. First and foremost… Read more »
>RCG your right. Maybe i fail to understand your industry as i have not done any research. However, i understand where your coming from which respects to selling a consernary to a cusotmer only once. But the possibiliys to cross sell and up sell was what i was trying to explain. For example, you already have the relationship with a specfic customer, so why not sell them more. Once they have purchaed a conserntry then sell them other products such as windows…better locks…a new front door? This is how you can make more money from your exisiting customers Mike your… Read more »
>RCG is on the ball with his comments. In the roofline manufacturing business we have the same problem of having one-off customers at the end of the line. Good service and attempting to harvest the goodwill by way of referrals is the way to maximise your opportunity. Any views on how to best to capture that good-will?
>Find a way of making your existing customer tick? Give a reason for them to refer your company :)
>Dan – we've done that a couple of times and it proved pretty successful. The trick is giving people a good enough reason.
>My experience suggests that in a growing retail business 60-70% of your business comes to you free of charge (or nearly free). This comes from good housekeeping – by getting recommendations mainly, and to a lesser degree selling to existing customers. You might also add passing trade, people have seen your vans. The 30-40% of your business is what costs you the money through advertising. Working out how to best spend that money is the difficult bit (and a different topic). The new customers you generate from that advertising becomes next years recommendations, so you get a mushroom effect, and… Read more »
>By the way, I still think you should put my website at the top of your blog roll list. I don't like being third from the bottom.
>RCG – you put mine further up and I'll do the same!
Well if you do a post make sure to say you were inspired by this one!
I think you have to have a balance of marketing and using your previous customer base. The previous customer database is always going to be the more immediately fruitful source of business.
>I guess in a way it depends where your sending your marketing money. If your a new business then of course, acquisition is the only course of action and this is done through advertising.
But, if you've already got your customer, then why not concentrate on them? Like you suggest "work the database hard".
Good topic indeed, am studying it for my final year dissertation :D
>would anyone care to guess where our 2m plus sales in last 6 months have morphed from.Clue not from any form of advertising without the legend DC but with trainee men.
>Thats good news. It also shows that no one is irreplacable.
>TG – ouch! Lol.