Is your next sale right under your nose?
Would you believe that 80% of your sales most likely come from 20% of your customers? The fact is that this is probably the case for the majority of businesses, small and large. This means that more than likely, your next sale will come from someone who has already done business with you.
Back in 1906, Vilfredo Pareto observed that 80% of Italy’s wealth was held by only 20% of the people. Then one day, upon examining his garden, he also realised that 20% of his pea pods accounted for 80% of his pea crop yield that year. Was there a lesson here? This got him thinking, and before long, the “Pareto Principle” was established. With surprising accuracy, this same principle can be applied to business. You may know it as the 80/20 rule.
This little-known principle sheds a lot of light on how businesses should be run. Rather than putting all your effort into new business, you would be wise to spend a sizeable bulk of your time following up and servicing people who have already given you business. After all, you’ve already broken down that first barrier. Upselling current customers should come naturally – as long as you are proactive in following up and providing top-notch service.
What does this mean to you?Imagine, about one-fifth of your customer base is just waiting for you to offer them something new. So if you’re not following up with your existing customers, you’re passing up 80% of your potential business. Of course, if you initially provided a poor experience, this may not be the case, but for companies that operate on a principle of integrity, this should be a natural course.
Think of it. You’ve probably already invested heavily in getting that first piece of business planning, advertising, promotional activity. Now it’s time to develop their “lifetime value.” There’s lot of things you can do to show appreciation:
Christmas and birthdays: a very good time to send a thoughtful gift or email.
Attend events: if your customer holds annual charity events or some meetings, make sure you take the time to visit and show your support.
Renewals: a great time to touch base with a notice of renewal that expresses your heartfelt appreciation for their business.
Incentives: put your money where your mouth is and demonstrate your customers’ value. A token incentive or discount can go a long way regarding future revenues.
Touch base: call your customers every so often to see how they are doing, how the product/service you sold them is performing and inquire or listen for any other needs. Use newsletter subscriptions or digital marketing (either custom or through your current website plan) to keep you top-of-mind.
Excellent service: the single-best way to ensure customers will remain loyal. Go above and beyond. You’ll be surprised at how much of an advocate that customer can turn out to be regarding referrals.
Make sure you offer them more products/services that will meet real needs. If they liked you and the product they bought, they’d buy from you again. The important thing is to stay top-of-mind.