“Our Best Source of New Business is Old Customers”
Most sales people are hired because they’re hunters. Most sales rewards are structured around new business.
As a result, the “thrill of the kill” is what drives most sales organizations. However, some very contrarian research suggests that its your “farmers and gatherers” rather than the “hunters” that need nurturing. Here’s why. You have a 60-70% chance of doing business again with your existing customers. You have a 30-40% chance of doing business with customers that you’ve lost to your competitors in the past. And you have only a 5-20% chance of closing a new customer. Yet where do we all spend our time? Chasing new customers!
If you want to drive top line growth more quickly and easily, here’s your action plan:
1. Put fresh eyes on your existing customers, by taking a different resource from the sales/customer service function along on the call who can ask the oh-so-valuable “dumb questions”. At any time between 5-30% of your customers could be doing more business with you, but even hunters get complacent and sell what they’ve always sold. Take advantage of the training opportunity for a new sales rep, a new customer service rep, or a new manager to ride along and engage in a different way with the customer (no bumps on a log need apply)
2. Go back to your “lost” customers, fix what drove them away, and invite them back with a compelling offer. Have you ever gone to a new vendor only to find out that the grass was not really much greener? Have you ever been embarrassed to go back to a prior supplier? Simply reach out to your lost customers, dig deep to find out what is was beyond the easy answer of “price” really caused them to switch, make sure you address it, and then let them know you’d love to do business again. Sweeten the offer with a special offer that has nothing to do with discounting your products.
3. Develop a plan to reactivate your “are they dead or just sleeping” customers. Most businesses have customers who have simply faded away. We don’t have a piece of lost business as a trigger, but we don’t hear from them anymore, or not as often as we used to. This is a gold mine worth investigating. Sometimes their needs have genuinely changed and they no longer have a need for your product or service. If that’s the case, wouldn’t you love to stop spending marketing dollars on someone who’ll never buy? Sometimes its “out of sight, out of mind” – they still need your product or service, but someone else has been making more noise and has achieved top-of-mind status, or were in the right place at the right time. Sometimes your old contact has moved on, and someone new is in place who doesn’t even know about you.
I’ve never seen these three strategies fail to generate new business when implemented well. The quote in the headline is on p. 157 of my just-released book, Profit in Plain Sight, there are some great downloadable resources in the chapter, and you’ll get more insights on exactly how to execute these strategies for impact. Enjoy!
