Why you’re probably sitting on an untapped gold mine and why you should be mining that gold before prospecting for more.
In my experience most business owners are sitting on an untapped gold mine and they don’t even know it.
So what is this untapped gold mine?
The answer is simple. It’s your existing customers.
Most companies are so focused on attracting new customers, they’re not following up effectively with the customers they’ve already got.
And that’s a huge missed opportunity, because the cost of selling to an existing customer is typically five times less than the cost of selling to a new customer.
That’s probably worth repeating:
The cost of selling to an existing customer is five times less than the cost of selling to a new customer.
Why? Because existing customers already know you and trust you – which gives you a huge advantage over the competition. You’ve already spent time and money building a relationship with your customer – why not maximize the value of that relationship.
So how can you sell more effectively to your existing customers?
In my experience a combination of just three major strategies can uncover major profits from your existing customers and lower your sales costs:
1. The Customer Satisfaction Strategy
Whenever you make a sale, make it a standard process to follow up shortly after the product or service was delivered and ask the customer for their feedback. Not only will you gain valuable information to help you improve your offerings, the customer will perceive you as valuing their opinion and you may also gain some valuable testimonials you can use in your marketing campaigns.
2. The Customer Retention Strategy
Follow up with your customers regularly. For example, once a month via email, quarterly via a newsletter and even once a twice a year via phone. Don’t try to sell. Instead provide your customers with valuable information that can help them solve their problems. When they are ready to buy again, you’ll be at the top of their mind.
3. The Customer Reactivation Strategy
You’ll probably have customers on your books that haven’t bought anything for a year or more. Don’t give up on these past customers. One of the best ways to reactivate past customers is with a printed newsletter. This may sound old fashioned, but with reactivation rates of 30% or more why not give it a try? In the newsletter let the customer know what’s going on in your business, what your latest products are and most importantly provide valuable information that they can use.
Few companies are systematically reaping the rewards of these powerful strategies and maximizing profits from existing customers. I strongly recommend you get there first.