The endless pursuit of new customers to grow a business often distracts us from looking after our existing customers. And there we create a potential downward spiral of more spending on marketing, more existing customers neglected and less sales to existing customers. The wrong answer? More marketing spend, more neglected customers, perhaps a reduction in prices or a change in product mix, less sales and so the spiral continues.
The Right Answer
Conventional wisdom states that it’s 6 times cheaper to sell products and services to existing clients than selling to new clients. Add to this that most customers don’t buy all of our products or services (many don’t even know the extent of them) and you have a compelling reason to focus on serving your customers better. All that’s needed is better education about how your products or services solve problems for your customers, how they add value, how they’re different to what may be offered by your competition.
The best thing about serving customers better is that they’re then likely to refer new business to you – especially if you ask and encourage them to do so. Not only will you increase your transaction value to your existing customers, but you’ll also be able to reduce your marketing spend as you’ll be getting new leads from those happy customers.
Here are some ideas to help increase transaction value:
Identify standard ‘up-sells’ – especially when they have a higher margin
Four for the price of three
Limited time offers
Free delivery with a minimum spend
Drop cheaper product options
Use checklists to increase sales options – list of services
Run events for your VIP customers and offer them a special offer
Focus on quality / benefits as opposed to cost
Work in a niche market / specialisation (there should be less competition)
Talk to us to get 10 more ideas