The number one priority of sales professionals for 2017 is to …
… sell more to existing customers, according to a recent survey by the RAIN Group.
Another study by the Alexander Group reports that salespeople seriously underpenetrate their existing customer base as they focus on finding new customers. They forget that the fastest way to build sales is to focus on penetration.
Perform a self-test
Analyze your sales in 2016 and calculate what percentage of your sales comes from each of these categories:
- Repeat orders (retention).
- New accounts (conversion).
- Selling new products or services to existing customers (penetration).
Increasing penetration
Salespeople who are willing to put in the hours preparing and learning about their customers, their problems and their needs record the highest penetration rates.
Here are strategies for increasing penetration:
- Identify products or services the customer could buy but doesn’t. Calculate the potential of the account by estimating what’s the customer’s buying from competitors.
- Develop a plan for expanding your pool of contacts within the account. Many purchasing managers have exclusive buying authority for their departments. Try to identify those managers and get plugged into your customers’ networks and associations.
- Keep trying to add value in all of your customer points of contact. The most important contributions you can give to existing customers is your knowledge and expertise. What information do you possess that may be of benefit to customers? Define value in customer terms. The possibilities of creating value are limitless: faster service, better delivery, easier ordering, and unique features and benefits.
- Give customers ideas on how to improve their business operations. Try to find solutions customers may not find on their own. You may be able to pick up ideas and techniques that can be helpful to other customers. Think in terms of solving problems for customers. Deliver customized or unique solutions that meet the customer’s special needs. Try to become the best information source the customer has.
- Make customers feel they have a special relationship with you. Look behind the numbers to understand the customer’s business strategy and financial situation. What are the customer’s business growth goals? What are the biggest profit drivers and drains? How can you help customers expand their business?
- Identify your customers’ customers. How can you help your customers increase penetration with their customers? Get all the information you can on customers. Keep moving closer to then. Once they’re comfortable with you, increased sales tend to follow.
Plan of action
It may be a good idea to consider customers as prospects and develop a plan of action for getting additional business from them. Here are strategies that may help:
- Flush out customer needs and try to determine how they’re being met now. If the business increase you want is going to competitors, try to come up with a meaningful differentiation. Most customers are being underserved in some way. Many of them may be in a relationship they lack the incentive to change. Try to get these customers to realize why they would be better off increasing their business with you.
- Recognize that the key to selling more to existing customers is in your after-sales support. Customers’ expectations and concerns regarding after-sale support influence their future purchasing decisions. When customers purchase a product or service, they believe they are buying more than the specific item. They usually have expectations regarding the degree of after-sales support the product or service carries with it. After-sales support may determine whether they’ll increase future orders or switch tier loyalties to another salesperson. Salespeople who increase sales to existing customers usually view after-sales support as an opportunity to strengthen their relationship.
- Let your customers know why it’s a good decision to increase their business with you. Customers want to feel they have made a good decision when they choose you, and your products or services. The best way to keep and expand their business is to reinforce that decision. Making an investment in building a bond with customers is critical in expanding your sales to them. If your only contact with customers is to sell them something, your chances of increasing penetration are small.
- Find out how customers feel about competitors who have the business you’re trying to get. What do they like or dislike about your competition? Analyzing the competition requires that you ask questions and gather and analyze information. The purpose is to find out what you’re competing against and what you need to change to get more of the business.
- Set dates by which targets should be reached. Evaluate the results and decide on whether fine-tuning and more follow-through is needed. Even if you don’t produce immediate results, your efforts could serve as a deterrent to customers switching business to the competition.
Adapted from research by the Alexander Group in Atlanta and the RAIN Group in Boston.
