Show notes
Everyone knows it's generally easier selling more to your existing clients than it is to sell to new customers. Still, many salespeople and business owners focus a lot of attention on getting new clients. But what are some of the best ways to earn more from your existing customer list?
David: Hi, and welcome to the podcast. Today, cohost Chris Templeton, and I will discuss earning more from your existing customer base. Hi Chris.
Chris: Hi David. You know, it does seem like many people focus a lot more on attracting new business than to selling to their existing customers. Why do you think that's the case, David?
David: Good question. I think a lot of it may have to do with just the idea of new customers. It's a lot more fun, a lot more sexy. People tend to gravitate toward that. Where the idea of selling to existing customers may seem a little bland compared to that. It could be some of that. It could be old habits dying hard. If you had a sales manager that you reported to, very often, you would be flogged for not bringing new customers through the door. So it could have something to do with that. The focus of the sales management or ownership, if the goal was to bring new people through. But I think a lot of it is just the idea that once we've conquered a particular account, once we've gotten that order, the tendency is to move on to the next one is to find the next customer, the next customer, the next order and that sort of thing. And sometimes we forget that it's been a while since we've gotten that order from the previous customer, and maybe it's just time to go back.
Chris: It just seems to me like a major disconnect that selling to existing customers is something that just doesn't get near the attention that it should. And we all know, we all know that it's the easiest sale. The most rewarding sale is the repeat sale, isn't it?
David: Yeah. And everybody can quote that. Everybody knows it, intellectually. We all know it. Probably anyone who's been in sales for any length of time knows that every business owner probably knows it. And yet it's just not practiced.
Chris: When you think about it, how costly do you think it is for people who fail to maximize that value of their customer base?
David: I think it's extremely costly. If you're not doing it, there's no question that you're missing out on revenue that you could otherwise have. In fact, one of the things that I focus on with my clients, whenever I take on a new client, if we're working one-on-one, or even if we're working in a small group, one of the first things that we'll do is to address that. Because if you want to grow your sales and profits, the way that I look at it is your existing customer base is going to account for some sort of percentage of that. So very often what I'll do is I'll say, okay, let's say I'm talking to somebody and they're doing half a million in sales and they want to get it to three quarters of a million in sales. One of the first questions that I'll ask them is what do you think you'll do with your existing customer base over the course of the next year?
In other words, if you did half a million dollars with them last year, what's it going to be this year? Is it going to be 550? Is it going to be 450? Is it going to be 250? Right? Are a lot of them going to have gone away? What's that going to be? And a lot of times it's just spit-balling. You're just sort of trying to figure out roughly what might be. But very often people will have a good idea of that. So they'll say, okay, well I did half a million with them last year. Maybe I'll do 525 or maybe I'll do 550 with them, depending on a couple of different things. And then I'll say, okay, well, if you really decided to focus on trying to get the most from them, what's the most you think you could get?
And in some cases they'll go to, you know, 575 or 600 or 650. And that tells you, right there, that a lot of times we know that there are dollars that could be had, and we're just not going after them. But then after that, once we've identified that we say, okay, so if you think you can get to 550 or 600 with your existing customer base, and your goal is to get to 750, now we're going to supplement the rest with new customers. So it makes sense to do that, but it really makes sense to start with identifying how much your existing and your previous customers could be worth to you over the course of the next year.
Chris: When you look at this and see this as such a common issue, I mean, my sense from what you just said is that most of your business owners who talk about this, it's something that just doesn't get first play in terms of my planning. What do you think is a better way to monetize existing clients?
David: Well, I think a lot of it has to do with the fact that we tend not to requalify our existing clients as often as we should. In other words, somebody buys something from us. Sometimes we tend to assume that they're going to be all set for a while. We think, okay, well, I don't have to go back to that person for a while, but that may not be the case. So one of the things that I encourage my clients to do is to make sure that we are constantly requalifying our existing clients., Are they done for the year now? Have they spent what they're going to spend? Do they have more things they need? And if so, when is that? When we look at qualifying clients, in general, whether they're new clients or whether they're existing clients, we want to find out the same things. What do they need?
When do they need it? Are they looking to buy something within the next three months? Are they looking to buy something five or six months down the line? And you can ask those questions. You can literally ask those questions right after someone has purchased something. Okay, what are you looking to do next? What's your timeline? And you can then get that into your tickler system so that you can follow up with them at the appropriate time to make sure that you're in front of them when they actually need your help. So a lot of that is just not built in. It comes from the idea, I think, of salespeople just being so happy that they've made a sale, that they just want to run onto the next one, rather than planning what's next for this particular client. And I think that's a big mistake.
Chris: I agree. And I think that one of the things that I just want to take a step back on, is talk about requalifying a little bit, because I think that there's, requalifying where some people are going to hear that and say, well, what do you mean ask them for another sale when you've just completed that? I think in what you're saying, there's a broader element of what's the relationship? How do I maintain the relationship moving forward? Because one of the things that I think is also a huge issue, with marketing to existing clients, is that sales people fall out of touch. And I think they feel guilty that they have. And I wonder if part of this is just about, do I have a standardized system that's going to help me to stay in touch with very little effort with my existing clients where I'm then even more comfortable with saying, Hey, I hope you got the last thing I got you. What's new? Anything we should be talking about? I mean, something that's more relationship, a little more relationship, and requalifying.
David: Yeah. And in some sense, we're talking about two different aspects of the sales process. One, when we talk about requalifying, for me, that's a very specific thing. And with the clients that I work with, when we talk about requalifying, what we mean is finding out which of the five levels of qualification a particular prospect or client is on. Are they ready to buy right now? Very few are, but that's the first level of qualification. Second level is, do they have a specific date in mind when they want to buy again? And some people will have a date in mind. And then when we know that,we can make sure that we get that scheduled and follow up with them appropriately, third group are the ones who are just generally receptive. They're open to the idea, but they're not quite sure exactly when. The fourth group are the ones who are just disqualified. And then the fifth group are the ones who are unresponsive. We try to find out what they need and when they need it. And they just won't get back to us.
Every single prospect we ever come into contact with, every single client we've ever had, will fall into one of those five categories. And so, when I talk about requalifying, all I mean is simply finding out which of those five categories are they in now? If they just completed purchasing something from us, then, chances are, they don't need to buy anything right now, but who knows, maybe they do. And so what we want to find out is, if they don't need to buy something else right now, then what is their timeline? Or are they just open to it? Or are they no longer open to it? Or are they not going to get back to me? That's all I mean, by qualifying. And then, what you're talking about is essentially what I refer to as a drip campaign. Being in touch with someone on an ongoing basis so that they can be in touch with you and you can be in touch with them when they might be ready to go. That's another aspect of it.
Chris: Well, and I also think that the advantage of the drip campaign is it keeps people moving toward level one, because I feel like, as a client, I'm not forgotten, I'm getting regular communication from my sales guy. And so I'm more likely to be able to be ready now, or, you know, whatever be receptive because I've maintained that relationship.