No matter which way you slice it, the ultimate goal of any business is to make more money. And in order to make more money, a company has to make more sales. On paper, this is a no-brainer. But this sentiment overlooks a very important factor of making money as a company:
The cost of making a sale.
So, more accurately, the ultimate goal of any business is to make more money while minimizing the cost of making sales. One of the best ways – if not the best way – to do so is to sell more to your existing customers.
In this article, we’ll discuss four main principles of selling more to your existing customers, providing effective sales techniques for each. We’ll also provide real-world examples of small, medium, and enterprise companies that have implemented these principles and techniques to increase sales numbers while keeping expenditures to a minimum.
But before we dive into these principles and techniques, let’s take a look at why focusing on selling more to your existing customers is so beneficial to your business.
The Benefits of Selling More to Your Existing Customers
When deciding whether you should focus on selling more to your existing customers or attempting to expand your customer base, the choice is clear.
According to data collected by SignalMind.com:
- Repeat customers spend an average of 33% more than first-time customers.
- The probability of converting an existing customer ranges from 60-70%, compared to the 5-20% chance of converting a new prospect.
- The cost of acquiring a new customer is 6-7 times that of the cost of retaining an existing customer.
In addition to that, customer loyalty data we’ve collected shows that:
- Existing customers are 50% more likely to try new products – and are 31% more likely to purchase them – than new prospects.
- The cost of getting a new customer up to the same level of profitability as a loyal customer is 1,600% higher than keeping said loyal customer at that level.
- A 5% increase in customer retention can lead to an increase in profits of 25%-95%.
The reasons behind these staggering numbers are actually quite simple.
For one, your current customers already know your brand exists. In other words, you don’t need to spend time and money introducing your services, explaining how you can help them, or differentiating your services from that of the competition.
Second of all, your current customers have already seen your product or service in action. They don’t have to be sold, quite literally, on your ability to solve a problem or ease a pain point in their lives.
If you’ve successfully provided for them in the past, they’ll be more likely to continue doing business with you. Put another way, your satisfied customers would be less likely to try a competitor’s service, not knowing whether it will be better or worse than the service you provide.
Selling more to existing customers is not only beneficial to your company’s bottom line, it’s also beneficial to the operations of your company as a whole.
It’s a virtuous cycle:
The more you sell to your existing customers, the more you prove your worth. The more you prove your worth, the more likely they are to trust you and come back to you in the future (at which point you can, again, prove that you can provide for their needs).
Throughout this cyclical process in which you forge a relationship with your loyal customers, you’ll inherently learn more about them not just as consumers, but as people. This will help you tailor your services in the future – again allowing you to better provide for your customers as time goes on.
Finally, the better you’re able to provide for the needs of your customers on a consistent basis, the more likely they are to become evangelists of your brand. Though that doesn’t necessarily have to do with selling more to that existing customer, it’s just another example of how doing so can benefit your company as a whole.
So, now that we have a well-rounded idea of why selling to existing customers is incredibly important, let’s dive into how to actually do it.
How To Sell More To Your Existing Customers
In the following section, we’ll discuss the main tenets of generating more sales from your existing customer base:
- Be Proactive and Responsive
- Be Communicative
- Provide Choice
- Be Thankful
We’ll provide actionable advice for each of these principles, as well as examples of how businesses of various sizes have implemented such advice to increase their sales numbers among their existing customers.
Let’s get started.
Be Proactively Responsive
This might sound like an oxymoron at first, but stay with me. As an entrepreneur, one of the most damaging actions you can take with regard to your business is…well…inaction.
By that I mean: don’t rest on your laurels after you’ve made your first sale to a customer. On the contrary, think of this initial sale as a seed that needs to be nurtured in order for a first-time customer to become a loyal follower of your brand.
“When selling to existing customers, you can’t use the same techniques you use to acquire new customers. Typically, going after new business is like fishing with a net — you don’t care which specific fish you catch, as long as you catch enough fish.
“But when selling to customers, you know exactly which fish you want and you can’t wait around for them to swim into your net. Instead, you need to find ways to reach out to them proactively. This means instead of waiting for ‘leads’ from your customers, find ways to engage them in challenger-sale style conversations about moving their business forward.”
– Jon Miller, CEO and Founder, Engagio
There’s a lot you can do once you’ve actually converted a prospect, such as:
Update Your Customer Segmentation
Each new customer you attain will provide valuable insight into how you segment your customers. They’ll either help you flesh out a customer segment you’ve already created, or will make you aware of a persona you may not have been targeting previously.
While revisiting your customer segments after onboarding each new customer you earn isn’t exactly practical (or possible), it’s important to revisit your personas from time to time in order to determine which of them has provided the most value to your company.
In turn, you’ll be better able to provide for the needs of these valuable customers – which brings us to the next piece of advice:
Use Knowledge Gained to Make Upsells and Cross-Sells
We’ve previously discussed the importance of making upsells and cross-sells when a customer is essentially ready to make a purchase.
But it’s also possible to make an up-sale or cross-sale long after they’ve already made a purchase. This is because, if you’ve done your homework, you now know much more about your customer than you previously had known.
Upsells long after a purchase have been proven to work best for “basic” products or services that a customer will eventually no longer need (or, more accurately, they’ll soon be equipped to utilize the advanced version of your product or service).
Because cross-selling is more about selling other, supplemental products or services (rather than selling an upgrade), it can be done at any time during or after a sale. Again, the more you know about a specific customer’s needs, the better you’ll be able to tailor these cross-sells to a specific individual.
Of course, there are more ways to learn about your customer than to simply analyze their purchases…
Perhaps the best way to figure out what to offer your customers in the future is to simply ask them what they want.
There are a number of ways you can do so, including:
- Asking customers to respond to surveys and questionnaires, both directly after they’ve made a purchase and after they’ve had time to use the product or service they purchased.
- Through interactions via social media, forums, and blog post comment sections.
- In person (both through conducting formal surveys and engaging in informal interaction).
By conducting this research and analyzing the results, you’ll gain a better understanding not only of your customers’ needs, but also of your company’s ability to provide for these needs. This knowledge can then help you develop your brand’s unique selling proposition, helping you stand out from other companies in your industry.
In turn, the customers who have previously done business with you – even those who may have been “on the fence” about whether to return to your company or defect to a competitor’s – will not only gain a better understanding of the value you bring to their lives, but they’ll also see that you’re willing to go the extra mile to bring this value to them.
And, hopefully, this will be enough to bring them back to your company the next time they’re in need of the services you offer.
The last section dealt with being proactive when it comes to researching your customers, and responsive in terms of providing for the needs you discover from this research.
Now, let’s discuss the importance of keeping your customers “in the know” with regard to improvements and changes to the services you offer.
Aside from ensuring your customers know when you have something new to offer them, being communicative shows that you value their input and have worked diligently to address their needs. In doing so, you make your customers feel valued and appreciated – making them more likely to continue doing business with you in the future.
First, Get Permission
No matter how you plan on communicating with your customers, rule number one is to get their permission first.
For one thing, this shows you value your customer’s privacy over all else. As we’ve alluded to, the modern consumer wants to be valued as an individual person, not just a faceless customer to be sold to. On the other hand, pushing marketing-related communication without gaining permission is a sure way to show your customers that you do, in fact, only care about making a sale.
Secondly, this “ask” gives customers the opportunity to provide additional information about themselves which you may not have otherwise been privy to. This can help you gain insight into the type of consumer they are, the types of products or services they’re looking for, and when and how they’re most likely to spend their money.
Lastly, by asking permission to reach out in the future, you’ll be able to determine which contact method is most convenient for each of your customers. Simply put: this will not only increase the chances of your message being read, but it will make it more likely that your message will be noticed in the first place.
Use Customer-Preferred Medium
To continue from the last section, there’s no point in reaching out to your customers if you’re doing so in a way that’s inconvenient for them.
Of course, not everyone prefers to be contacted through the same method.
So, as mentioned in the section above, you need to figure out all the possible ways in which your customers prefer to be contacted. Then you also need to tailor your message to make it relevant for that specific medium.
In other words, for a single campaign, you’ll need to strategize how to get your message in front of people who prefer to be contacted by/through mediums such as:
- Social Media
- Smartphone capabilities (text, push notifications, etc.)
In the next section, we’ll go into greater detail about how to tweak your communications to best-fit a chosen medium.
Segment and Personalize Outreach
Once you know how to best reach your customers, you need to make sure the message you’re sending them will effectively spur them into action. However, this is where communication becomes a bit tricky.
On the one hand, for your message to resonate with a customer, it needs to “hit home” in a way that makes them say “Wow, these guys read my mind!”
On the other, if your message makes your customer think that you’re watching them through a slit in the blinds, they’re going to be immediately turned off – and might choose not to do business with you in the future at all.
For example, read the following push notifications:
Now, imagine these notifications were sent to someone who signed up to receive notifications, but who didn’t supply their name. In this case, the message on the left would likely be well-received, while the one on the right would probably creep them the heck out.
But, now imagine the person who signed up for these notifications did supply their name (and provided other information). In that case, the message on the left comes off as rather generic and impersonal, while the other one seems much more inviting.
This same sentiment applies when tailoring the actual offer communicated, too.
Did CalorieRocket ask Alice where she lives? And did the company ask her what kind of food she likes? If so, then everything here is all well and good.
If the company didn’t ask for this information (and possibly dug it up by stalking Alice’s social media pages, or sneakily accessing information via other apps after she installed CalorieRocket)…well, that’s not good at all.
Simply put: if a customer has provided you with information, it means they want you to use it to help them solve a problem they’re facing. If they haven’t, then that information should literally be none of your business.
That being said, you should certainly take advantage of any and all information your customers have given you in order to help them when they’re most in need.
While some opportunities might not be so time-sensitive, others definitely are – and you could miss out on a sale if you don’t strike while the iron is hot.
For example, venues that host sporting events and concerts will usually offer customers the opportunity to receive updates when tickets for future events become available. While the rabid Met fan might know exactly when the next home game against the Nationals is, the casual fan might not keep up with the team’s schedule as much. If sites like StubHub neglect to send a reminder of such, they’ll certainly miss out on a good amount of sales.
In addition to being time-sensitive, some windows of opportunity are only valid when a consumer is in a specific physical location.
Recently, companies have begun integrating geofencing into their apps. In short, this allows the app to send push notifications to individuals whenever they’re within a certain distance of a physical store.
For customers who may be on the fence about taking the time to stop into a certain store as they walk by, these notifications might be the nudge they need to come in and make some purchases.
As we discussed before, such notifications should only be communicated if the customer has given explicit permission for the app to do so. If a customer feels like they’re being tracked by an app that never asked for their location data, they’ll almost certainly delete it for good.
Additionally, these types of notifications can definitely wear out their welcome if sent too frequently. For example, if a user who’s signed up to receive push notifications from Target works at a Starbucks housed within a Target, the “ding” they’d hear every time they pulled into the parking lot would probably go from being a convenience to a nuisance rather quickly.
But I digress.
The point is, though your current happy customers are more apt to buy from you than from a competitor at any given time, that doesn’t mean you should just sit back and wait for them to come to you again. A gentle nudge here and there can be just what’s needed to get your brand back to the top of their mind.
Even though we’ve hammered on the idea that your offers should be personalized, and that you should cater to the individual needs of your customers, it’s important to keep in mind that they’re fully capable of making decisions on their own – without you holding their hand.
That being said, the best course of action is almost always to provide your customers with a number of options (having explained the values of each in an objective manner), and let them make the final decision on which path to choose.
One quick caveat: Avoid providing too many options whenever possible. Doing so could unintentionally overwhelm your customer, leading them to walk away without having made any purchase at all.
Method of Shopping
This one’s pretty straightforward. Some people love the convenience of shopping online. Some enjoy perusing a store’s physical location. Others want a hybrid of the two.
While it’s not necessarily plausible for all businesses (especially startups) to offer both a physical and virtual location for their customers, by not providing both options you’ll inherently miss out on at least some potential sales over time.
Level of Assistance
Whether you run an e-commerce or brick-and-mortar store, your vast array of customers will prefer a variety of levels of assistance from you and your staff. As with communication, you need to walk a fine line here: You can’t be too helpful, but you can’t be too hands-off, either.
Offering too much assistance is not only overbearing, but it also insinuates that the customer won’t possibly be able to figure out what they want on their own. But, on the other hand, being too lackadaisical can make your customers think you don’t care whether or not they get the help they need.
If you’ve ever been to an Apple store, you’ve probably experienced just the right amount of assistance. Upon entering the store, a staff member assigns him or herself to you, and will circle back to you whenever you appear to be in need. While they will explain the best course of action for you to take given your situation, they’ll also yield to your expressed desires once you’ve made a decision.
To avoid alienating your customers, aim to determine how much assistance they want and need immediately – then provide exactly that, and no more.
Point of Sale
We mentioned upselling, cross-selling, and downselling earlier, so we won’t go into much detail here. Just to reiterate and be clear:
Providing options for customers who might benefit from an advanced version of a product or service, or from a product that would supplement the use of their main purchase, is a great way to provide value (and gain an extra sale in the process).
But, again, if you push too hard to upsell or cross-sell your customer, they might walk away without even making the original purchase they planned on making.
Be Thankful and Appreciative
Your customers are the reason your business exists. So why wouldn’t you be thankful for them whenever they buy from you? But, even if you really are thankful, the question is: do your customers know it?
If you haven’t done anything to make this explicitly clear to your customers, it’s a toss-up of whether they truly know how appreciative you are of their patronage.
Being thankful and showing appreciation has a number of benefits:
- It makes your customers feel truly valued
- It increases their trust in your company – as well as their loyalty to your brand
- This all comes together to make them more likely to recommend your services to their peers
So, how can you make it clear that you appreciate and value your most loyal customers?
Keep In Touch
We’ve woven this advice throughout this article many times, but it still bears repeating: By staying in touch with your customers, your brand will more easily come to mind when they’re in need of the services you provide.
We’ve been using the term “appreciate” in the same vein as “being thankful.” But you can also show you appreciate the struggles your customers face and the gains they’ve made through using your services – and keep in touch to make sure they’re on track.
Now, you of course don’t want to be underhanded and use such outreach as a bait-and-switch of sorts (in other words, don’t under-deliver and then try to make a subsequent sale when your first solution didn’t work out).
But by keeping in touch and ensuring your service is fulfilling the promise you made in the first place, you can then use the opportunity to ask if there’s anything else you can do to help your satisfied customer.
Celebrate Wins and Loyalty
Going along with this last sentiment, celebrating your customers’ successes is a great way to show you truly do care about them as people – not just sources of revenue.
You can do this in a number of ways, from featuring their success story on your website or newsletter to rewarding them with discounts or freebies for reaching a certain milestone.
In the case above, Honda-loyal Joe was presented with a brand new Accord for his efforts. While the car company didn’t necessarily make any money off of that customer, the publicity it gained from the whole ordeal most likely made up for it.
Another way to celebrate loyalty is to make it a game. This tactic has been used for years, and has been referenced at least once on Seinfeld. From punch cards to sticker-collection games (like McDonald’s Monopoly campaign), there are a ton of ways you can gamify loyalty.
Promote and Reward Evangelism
This is more of an aside, as it doesn’t involve selling to current customers, but rather using these customers as leverage to sell to new prospects.
For more info on best practices for providing incentives for customers to recommend your brand, check out ReferralCandy’s list of 47 examples of referral programs implemented by major international brands.
As we’ve said, the goals of running a business are to sell as much as possible, and generate as much revenue as possible – while providing ultimate value to your customers.
Having already provided value and satisfied your current customers’ needs puts you in prime position to keep doing so with those same customers, continually making money for your company in the process. By approaching your current customers strategically, you’ll make them more likely to return to you when in need of your services in the future.