If you need to grow your business, are you focusing on identifying prospects, converting them into leads, and actively converting those leads into paying customers? If so, you should consider changing your focus. Why?
Because focusing on growth through acquiring new customers is the hardest, riskiest, least profitable and least efficient way for you to grow. Growing through new customers is intuitive. For example, it’s easy to assume that growing the number of customers you serve by 35 percent will grow your business by 35 percent.
But while it may be intuitive, that approach can hurt your potential business performance. It often leads to expending more time, effort, and money to grow your business than necessary. It’s been said many places that people only buy from a business once they have gotten to the point they “know, like, and trust” a business and its products and services.
Think about a group of people who know, like, and trust your business and products. Hmm, let’s see. Someone who is aware of your business and knows about you. Someone who likes your business and products. And someone who trusts that you can help them with what they need.
That sounds an awful lot like an existing customer.
Yet, when it comes to existing customers, many business owners and managers become complacent. They fall into the trap of assuming that existing customers will come and buy from the business when they next need what the business sells. The truth is, however, that every business has at least one additional product or service they could sell to existing customers. And usually they have several additional products or services they could sell.
But for some reason they don’t proactively market their additional products and services to their existing customers. Instead of focusing their marketing dollars on selling more stuff to who they already deal with, they focus on selling something to someone “new”. And that means they miss out on a huge amount of potential growth and profit.
Customer Share vs. Market Share
If you are guilty of focusing more effort on getting new customers than selling to your existing customers, rise up to the following challenge. Pledge that, starting today, for one month, you will stop thinking about market share. Instead start thinking about customer share.
Think of the products or services that your customers need and are buying from other businesses right now that are related to your products and services. Identify the ones from that list that they could buy from you — if you offered them to your existing customers.
Some of these related products and services you can offer and deliver yourself. Those are the ones that hold the most potential to dramatically grow your revenue and even more importantly — your profit and cash flow. For these products, your marketing costs are much lower than selling to a new customer. Your business has already incurred the high expense and borne the effort of identifying and attracting them the first time.
The natural resistance and barriers to change are largely eliminated when you are approaching and talking to your existing customers. By focusing your marketing efforts on your existing client base, and prospects you already know, you will dramatically increase the effectiveness of your marketing efforts.
There are Several Advantages to this Approach:
- You already know who, specifically, these people are (you DO capture customer contact details, don’ t you?)
- You know what they purchased previously so you have insight into their needs.
- You know how profitable they are for your business.
- They are already familiar with your business, its personality and style, its products and services, and the benefits of dealing with you compared to another competitor of yours.
- And, as a result of a, you will be able to close more sales and select customers who are most likely to be highly profitable.
- You will also find you need to spend far less time and money than you might have thought.
When it comes to marketing and increasing the profits of your business, remember share of customer trumps market share.
The truth is that, depending on your goals for growing your business, you might just have all the customers you need.
Customers Photo via Shutterstock
Today, focus on customer over market is more important. Great job really nailing down the emphasis on this!
Great article, Steve! Our current customer base can tell us everything we need to know about our products or services, if we just take the time to listen and understand their needs. I think you made it very clear that there should be a shift in focus from attracting new customers, to improving the relationships we have already established. In the end, your business will only benefit.
Yes I agree about taking better care of existing customers, offering them more of what they want but I find that still striving to achieve a larger customer base through new customers is still worth it. Why can’t you do both as it just makes more sense to focus on both…
Well written article, as it has truly focused on importance of customer under the current scenario. Where they have to be handled smartly & careful enough to survive competition.
I agree. It is always better to nurture existing customers and let them refer customers to you. This is a better way of sustaining a business.