Sell more to existing customers to boost growth
The just-started conversation we're about to enter happens way too often.
Advisor: I certainly agree. We all want to grow our businesses - assuming, of course, that we can grow them profitably. Is your business profitable?
Business owner: Oh, yes. The check book is fat.
Advisor: What goals have you set for the business this year?
Owner: Well, to grow of course. I think 10 percent growth is realistic.
Advisor: What other goals do you have? Service improvements? New products?
Owner: Not really. Growing the business is key.
Advisor: Tell me about your competitors.
Owner: Well, their product (or service) isn't as good as ours. And we know our customers. Acme has been with us for, oh, 10 years I'd say. Zender has been around even longer, maybe 15 years.
Advisor: That's impressive. How often do you talk with the people at Acme and Zender?
Owner: Our sales people are there monthly.
Advisor: Do you ever get together with their senior management, not so much to sell but maybe to discuss business issues - to ask what challenges Acme sees or Zender worries about?
Owner: Oh, no. They've been customers for years. We know what they need.
Advisor: Have your sales to regular customers like Zender and Acme been growing? Have you introduced any new products (or services) to them in the last year or so?
Owner: Actually, sales have been rather flat. That's why we're talking to you, so you can help us bring in some new customers.
Advisor: That certainly is something we will explore. New customers are important, but it takes time to establish your presence and quality with a new customer. It often is faster and less expensive to explore ways we can sell more to existing customers. They already know you and, since they buy from your company, presumably are satisfied.
But they may not know all of your capabilities. You probably have good opportunities to grow, with relatively little expense, at Acme and Zender.
Who do you personally connect with at those companies - and at other long-term customers?
Owner: Well, I think Charlie still is at Acme. He's been the head buyer for about 30 years. Lately, though, our chief sales guy has mentioned someone named Charlene.
Back to real life: Whether you're a consultant hoping to land a gig or a business owner looking for growth, you've probably had this type of conversation. And it's true: Just like new products and new services, new customers and new markets are important to growth.
Yet growth often is faster and less costly if you're in a position to sell more to existing customers. That means, however, that you, or maybe your number two person, need to actually stay in touch with customers. Lunch. A visit to the customer's facility - anyplace where you can talk about your customer's outlook and goals, and, especially, how your business can help.
• Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Listen to Jim's Business Owners' Pod Talk at www.kendallcom.com/podcast. © 2016 Kendall Communications Inc.