How to increase revenue from existing customers

Any small business owner will respond with advertisements, flyers, leaflets, direct mail, and other forms of marketing. While they’re all great strategies to market your business, they’re all expensive! What if I could provide you with a more efficient and effective method of selling your business? In this article, I’ll share some crucial suggestions for growing your business and, as a result, your income with you.

The most common blunder firms make is focusing all of their marketing efforts and resources on acquiring new consumers. According to studies, acquiring a new customer costs up to six times more than keeping or selling to an existing one. And this is the crucial point. Concentrate on selling to your current customers. Simple! Increasing your bottom line by extracting more revenues from your customer base is a cost-effective strategy.

So, let’s have a look at how you may extract more earnings from your client base.

The Pareto Principle

Pareto’s Law is undoubtedly familiar to you. The 80/20 rule is a term that many people are familiar with. If you examine your sales pattern in a sales environment, you may find that only 20% of your clients account for 80% of your revenue. The premise remains the same, even if the percentages differ slightly. Yes, learning that a tiny number of customers account for the majority of your revenue may come as a shock, but now that you know, you can design a strategy to boost profitability!

Identifying your top 20% profitable clients is the first step in squeezing out more profit. To do this, you’ll obviously need a database that keeps track of who orders what and how much. What? You don’t have any? It’s critical to keep track of your customers’ interactions with you. Get a database up and operating as soon as possible! The time and work put into setting this up and keeping it current will be soon repaid.

Encourage them to buy more frequently.

After you’ve identified your highest-earning customers, the next stage is to figure out how to entice them to buy more regularly. Increasing their ordering frequency may appear straightforward, but that’s the beauty of it… it is! If you’re in the retail or supply industry, this method is very useful. The goal is to catch the customer before they realize they need your product or service and provide it to them either before they realize they need it or before they go to a rival.

So, how does this function? Take, for example, your client Bodgit Ltd. You look over their purchase history (from the database you’ve just built up!) and notice that they re-order every 6 weeks or so. However, there are gaps in some months, indicating that they may switch to competitors on occasion. Make a note on your calendar for one week before you expect them to place another order. Pick up the phone when the time comes and say, “Mr. Smith, I assume you’re running out on widgets?” Do you want me to send you your usual amount or do you require more?”

“Wow,” exclaims Mr. Smith, “this company is sharp!” Result? One happy customer; one more check to deposit; an order that may have gone to a competitor now comes to you! Consider how you can use this strategy to your own business. It’s worth a shot.

Increase the order value on average

Why not get your customers to spend more money in addition to buying more frequently? They may purchase one product from you, but a complementary product from a competitor, which you also provide. Make a brave move and ask for a larger slice of the pie! Instead of decreasing your margins to get a price, consider if you can customize the product to match his wants. Is it possible for you to change your delivery method? Is it possible for you to give greater after-sales service? Examine all of these options to discover how you may increase your revenue. If you must reduce your margins, calculate how much additional profit you will make overall if your average order value rises.

If you have a large product line, you might be surprised to learn that some of your clients are unaware of what you have to offer. Making sure your buyer understands what you sell should be a part of your profit-maximizing plan! When was the last time you called a customer only to discuss your product or service offerings? You may be surprised at how little they know!

Speak with them.

Too often, a company’s sole touch with its customers is when they place an order. Until the next order is placed, the buyer receives no communication. Find any excuse to speak with your profitable customers to encourage them to conduct more business. Make a concerted effort to communicate with them on a regular basis. Inquire as to what they require from you. What must you do to increase your business with them? Would a new addition to your line be a good fit for what they’re looking for? Question after question after question after question after question after question after question after question after question after question Even if nothing comes of your discussions right away, they’ll know you’re interested in them. All of this promotes customer loyalty to you and your company.

They are incredible!

Instead of picking up the phone and soliciting new business, why not just call to say hello? It’s still worth calling to double-check service levels and make sure everything is running properly.

If you see something relevant to one of your clients’ businesses in a magazine or newspaper, cut it out and send a note saying, “I saw this and thought it could be of interest to you.” It’s a tiny gesture, but it sends a message to them about how important they are to you.

Referrals

In addition to seeking to persuade your present clients to give you more business, why not ask them to connect you to one of their business acquaintances? You can get more money out of them by tapping into another firm in this way, and you won’t have to spend any money on advertising! The importance of referrals cannot be overstated. The mark of approval for your firm is stamped on them by the referrer. This is a great example of how increase revenue from existing customers, don’t forget about the others.

Concentrating on the top 20% of your customer base may put you at risk of missing out on a potential diamond hiding in the other 80%. Set aside some time to work on this aspect of your company. Select a few consumers from your database that you believe may become a 20% business with a little courting. Make a strategy to woo them!

It is possible to increase revenue from existing customers. It requires forethought, effort, and a dash of cheek! It’s all about fostering and maintaining a positive relationship so that people love doing business with you.

Don’t take them for granted, and your revenues will skyrocket!