Many small to medium companies are experiencing flat or declining sales in these difficult times and see new business as the holy grail, the answer to all their problems. What sometimes eludes these business owners is that new business does not have to mean new customers.
In fact, it is more cost effective to your business to ‘farm’ existing customers, by providing additional product and services to someone who has already bought from you, and therefore knows the quality of your offering, than to ‘hunt’ for new customers who have no experience of what you offer. Indeed, the cost of keeping an existing customer can be as low as one fifth of the cost of finding a new one.
You can farm existing customers, by identifying more of their needs and providing a relevant solution, rather than hunting for new customers, whose needs you don’t know. So, on the understanding that it’s better to farm an existing customer, it makes sense that new products or services should be based on offering either a better solution to current customers’ problems or solutions to other problems that they have.
Business success is all about retaining and developing the right customers for your business. If you treat them right, you can make live customers into loyal customers and satisfied customers are good word of mouth advocates for your business. If you don’t, the chances are that they will lapse and you will eventually lose them. To stop live customers lapsing, do you know when they should next be likely to buy?
A piece of research in the US asked why customers stopped buying from companies? Was it price or quality? Had they changed location? 68% respondents ticked no specific reason. So they conducted further research amongst this group to try and find a reason and the main response was ‘because they didn’t keep in touch’! So regular contact with your customer base is critical