HOW TO INCREASE YOUR MARKET SHARE BY SELLING TO EXISTING CUSTOMERS
It takes a lot of effort and a lot of marketing dollars to reach and then sell to new customers. It’s often easier and more effective to sell more to existing customers than it is to acquire new ones. The first step is to understand why your existing customers turn to you. Once you understand why your existing customers come to you, you can examine ways of getting them to buy more, more frequently or other products / services.
Have you heard of the 80/20 rule? The Pareto principle – but commonly referred to as the 80/20 rule – says that 80 percent of your success is due to 20 per cent of your effort. Use this idea as a starting point to analyze how you can sell more to existing customers. For example, if a small number of your products and services account for most of your profit, can you sell more of the less profitable products to your customers? Or if your higher-margin products or services are only being sold to a small percentage of your customers, how can you raise that percentage?
Here are three ways to increase your market share by selling to existing customers.
1. Sell More Often
You can increase market share by getting customers to buy more frequently. If your research shows customers buy at a particular time, make contact with them just beforehand. For example, if you know that a business buys its stock from you at the end of each month, a courtesy phone call or letter in the middle of the month can be useful.
You can also add value to your products and services to ensure repeat business. For example, is there anything you can add to a service at little cost that is useful to your customers such as a free ‘tune up’ every time they send their computer in for repair?
Where appropriate, encourage customers to buy a premium product or service that better meets their needs and provides a superior return for you. This is known as ‘up-selling.’ You could also offer purchase incentives and price promotions on items that they usually buy from competitors, such as ‘buy one get one free’ or ‘buy for ten months and get two free’. It’s also useful to focus on selling complementary products.
While during a recession, it is difficult to hunt for new business, those currently dealing with customers can work to bring in new business by identifying other needs. This can be done by cross-selling services. Existing customers are able to help identify portfolio gaps – areas where a business could successfully offer additional services to customers. In this way, businesses are able to provide customers with what they need and simultaneously create new opportunities for the business.
Making more and better efforts to coddle your existing customers can turn them into perpetual gold mines of additional business and revenue. The more you satisfy them, the more likely they are to spread positive word-of-mouth. That, in turn, can become the single biggest way to win new customers.
QUOTE OF THE WEEK
“Profit in business comes from repeat customers; customers that boast about your project or service and that bring friends with them.” W. Edwards Deming
© 2010 – 2011, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.