Should I focus on nurturing existing customers or acquiring new ones?
I know I need to spend time on both, but with a small team is it better to spend more time trying to nurture and upsell existing customers or acquire new ones? I do send out periodic newsletters to existing customers, but I have not gone to the next level of really tailoring our communications. This would take time and I have been spending a lot of time going to trade shows and trying to sell to new customers. Thanks for any feedback.
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Nov 29, 2014
Carrie - You should be doing both. You're building a relationship with your current client base, these folks sustain your existence. But you need to acquire new ones if you want to grow your business. Tradeshows are the best way to get yourself out there. They can be costly though.
Nov 16, 2014
A question: when you are talking about your client are you referring to direct customers or business partners who retail your goods. If you are referring to end customers, you have a relatively limited market for additional sales.
For business customers/retailers you have a small problem in the fact that small retailers will unlikely refer you to their own competition. I would do a detailed statistics of specific areas you are currently selling to and see performance of current retailers and depending on the market situation (population, market segmentation, laptop sales) try to focus on specific areas to find additional retailers.
Because, even though it is usually easier to push sales to existing customer base (who know the product and the quality) sometimes it is counter productive to push retailers to sell more if it is shown that they are not capable of doing that. Sometimes you just deal with wrong partners.
Good statistics and data analysis should point you to the right way.
Nov 14, 2014
I am new to this site,
Before reading anyone else's response my answer was asking for referrals from current satisfied clients. It really is the best and most overlooked strategy to growing a sound business.
Then I read the responses. This group is full of smart and helpful people. Glad to me apart of it.
Nov 14, 2014
Trying out new customers while servicing the existing will certainly give a creative / innovative outlook that will also have some impact while serving the existing customers.
Innovation and exploring new will make your business going.. You need to manage your time.. Keep 20% (minimum) of your time towards new clients and make sure your existing clients do not get ignored.
Nov 10, 2014
Hello Carrie! The wonderful thing about your question is that you can do both at the same time. If your company was branded on the internet in the correct way, your current & past customers would be engaged every week with your business and new customers would be finding you on a daily basis!
If you would like to learn more about all this, reach out to me at (713) 873-1174
Good luck!
-JT
Nov 8, 2014
The answer is both, but you need to understand the customs of your industry.
Additionally, I believe you have to define who is your customer you are referring to and your sales strategy? Is it the end consumer, the distributor/wholesaler, the retailer or all of them? Each is going to require a different methodology.
In your industry it is extremely rare that a designer/manufacturer, like yourself, sells directly to the retailer, typically there is some wholesaler/distributor that handles this. They (singular or multiple based on territory) are the one(s) responsible to find retailers to sell your product and service them.
Your responsibility is to that wholesaler/distributor. It's also your responsibility as the designer/manufacturer to do the appropriate marketing (advertising (digital and traditional), public relations, social media, appearances, direct marketing, etc.) to generate AIDA (awareness, interest, desire and action) for your products — action being visiting your website or their local retailer.
Since your sales/distribution strategy appears to include direct sales to the consumer, then your responsibility includes ensuring the consumer can find your website. A quick review of your site's content and code shows you're not doing everything you can to set yourself up to be found and to build trust.
You're missing keywords and page descriptions, which are critical to your Internet visibility and success. You have no links to your retailers websites and of the half dozen retailers websites I looked at they have no reference of your brand or any backlinks to your website. Items needed to increase visibility.
You're also missing critical content (terms & conditions, warranty, return and privacy policies along with news/media center, about us/designer, product information) to build trust and drive action.
You ask visitors to "Join" but what are they joining? What should they expect to receive when they join? Is there a loyalty program, do they get special discounts, first looks at new designs, etc.?
Speaking of loyalty programs, how do you know who is buying your product at your retailers? Are you driving them to your website to register their item purchased? I don't see anything. Are you driving them to your Facebook page to post a photo of the person with your product?
Speaking of discounts, are you utilizing social commerce plugins, like AddShoppers, to entice visitors to like, post, tweet, pin, etc. in return for a discount on their purchase? It doesn't look like it.
Do you have an abandoned cart plan to entice and capture those who left your site without purchasing the product(s) they put in their cart?
Right now I'd have to presume you have a high customer acquisition cost, therefore you have to do everything you can to maximize efficiency of your marketing investment while minimizing customer acquisition costs.
Nov 8, 2014
This is something that small business owners toil with over and over and my best answer would be this, it has to be a delicate balance of the two.
New sales, at least in my industry are much more profitable that monthly revenue from past sales. In many industries, there is no ongoing profit at all. However, one of the best ways to sell NEW clients is testimonials and praise from PREVIOUS clients. See where I am headed with this?
I would suggest fine tuning an email marketing list and send bi-montly emails out to old clients just to remind them of who you are or changes in your industry as a minimum. Also, if applicable, start gather testimonials and reviews ONLINE about your business to foster NEW sales.
Nov 8, 2014
BOTH!
Nurture the Clients you want to keep, break ties with the ones you don't, & grow your client based by Profiling Your Favorite Clients!
Most important, keep & find clients that are of your Vibrational Match - those that feed your Life's Purpose!
Cheers to Living Your Bliss,
Julie Danette
Nov 7, 2014
Ask yourself what repeat business you can reasonably expect to receive from individuals who have already purchased one of your covers. Realistically it is quite limited, therefore it is imperative that you leverage your existing customers when seeking out new ones. To this end you should mount a referral reward programme for both existing and new customers, and then you can simplify your marketing focus to effectively target both new and repeat business simultaneously.
Nov 7, 2014
Both! Although studies have shown client retention generates more revenue then acquisition. It costs a lot to gain new clients vs. keeping/building upon existing ones.
Nov 6, 2014
Hi Carrie- thanks for your question.
Depends on whether you need to fire any of your current customers? Sound harsh? Please read on..
I'd approach this from a few angles. Firstly, which clients are your dream target customers? Are they those within your database that you have already worked with, or are you approaching trade shows to attract your dream customers there. If you are running around after clients who:
a. Don't give you the right margins.
b. Gobble up precious time and resource.
c. You don't enjoy working with.
It gives you more of an indication as to whether they are your ideal target customer.
Either way, I'd take this approach and do both, but using a process and software that will streamline and make it much more feasible:
Attract, Sell, Wow.
Attract
Attract enables you to reach new people (dream customers). I wouldn't do it through trade shows, but instead I'd use an Inbound Marketing approach, where you create a lead magnet (eBook/ Whitepaper) in exchange for their email address). They come into the top of your sales funnel. And you can semi automate this with the right software.
Sell
No point attracting the leads unless you can sell to them. As they move down your sales funnel (as a result of you emailing them automatically content that completely scratches their need) you will allocate points to them based on their interaction with you and your content. Once they hit a certain score, you then look to close them.
Wow
This is where you excel their expectations, deliver an amazing service, ask your customers for referrals and then up-sell to them as well.
It's common knowledge that it takes 7x the amount of resource to find a new customer than it does to look after an existing client.
But that argument doesn't work, if the clients you currently have don't give you the margins and you need to fire some of them!
Love to talk further- drop me a line :)
Nov 6, 2014
Although spending time and funds to acquiring new customers is important the most ROI is getting referrals from existing clients. I hope you have a follow up process after you finish a project for a client. At the end of that follow up I suggest asking them if they would recommend you to other people. Get the names and numbers written down or have your client refer you themselves, but sometimes they don't do what they promised. As long as you give great service to your existing clients they are happy to refer you to others. Nurture existing customers to get referrals and up-sell them.
Nov 7, 2014
Seems like the referral is a common theme here. I need to work on that. I actually sell a product, designer bags, but I think that may make it even easier. I can always offer a discount or free bag for referrals. I am excited to think through a referral program. Thanks.
Nov 6, 2014
It is almost always cheaper and easier to keep an existing customer than it is to acquire a new one. So if time and budget are a consideration then it may suit you to focus 80% of your effort on existing customers, turn them into evangelists for your brand which in turn will drive new customers from referrals.
Nov 6, 2014
Hi Carrie,
That is a great question and I hear the same or similar from small business owners I work with on a regular basis.The temptation is to always be seeking new and creative ways to attract new customers.
Think of yourself as a consumer. Where are you more likely to spend your money or even what you look for in financial institutions where you place your money? How does it feel when you walk into that business and they know your name? How do you feel when you are made to feel as if you were important to their business and not just "another client" or "another customer."?
Most businesses, large and small, can get new customers and clients. Retaining their clients is where there is a huge gap. You have an opportunity to set yourself apart by nurturing those important relationships so they they WANT to stay with you and become your loyal advocates...and spread the word about your business.
Research indicates that loyal customers are worth up to 10 times the value of their first purchase. So I would recommend that you stop and calculate the Lifetime Value of your customers if they stay with you for 2 - 5 years. You may find that the costs you're incurring for attracting new customers may far outweigh the benefits of nurturing the relationship with your existing customers.
While there is nothing wrong is attracting new customers as you will lose some for various reasons, I would strongly encourage you to map out a campaign for follow-ups, making your customers feel special, ask them to tell you how you and your business are doing -- if their needs are being met, really listen and, if you do an honest evaluation and see where improvements need to be made, do so and let them know how much you appreciate them. Make them feel special. Send an unexpected card. These, along with the excellent customer care you deliver can go a far way in keeping your existing customers loyal so that you spend more time doing what you love and less time chasing new customers.
You probably can tell that this is a topic I'm very passionate about, and I hope my comments help. Wishing you much success!
Nov 6, 2014
Hi Carrie
Great question that is at the heart of every business.
I agree with you. You do need to spend time on both.
However, from your question it seems that you are very close to the action and that it might be worthwhile if you consider this question from the macro perspective.
1. Cash is king! Securing your existing revenue stream is critical to a business. You think it is hard winning new clients now, imagine how challenging the task would be if you were losing clients! You need to give your existing clients the perception that they are loved so they will continue to use your offer.
2. Are your clients ready to be upsold? To the extent that you can, I suggest you develop; solid, deep, and open relationships with your existing clients. If you develop strong relationships with your clients they will tell you their problems and give you the opportunity to upsell to them. In my experience, most clients will be satisfied with the entry level offer, so your role is to classify your clients accordingly and always be on the lookout for the opportunity. By all means, show all your clients you upsale offer, but quickly classify them into those that might buy and those that won't.
3. Ask for referals. If you have great relationships with your clients and they "love" your offer ask them to refer to you others they know who might need your offer.
4 Seek to leverage your skills and capabilities. The more you tailor your offer to individual clients the lesser your ability to leverage your skills and capabilities. My advice is to segment your clients and tailor communications to the segments and try to avoid individual tailoring as it is too expensive.
5. Is there another way to reach your niche? Whilst closing on prospects needs to be done individually, can you generate strong leads on mass? By having strong relationships with your existing clients you can learn where they like to congregate, and it is those places where you need to be.
Mark
Inspirational Leaders
Nov 7, 2014
Thanks for the helpful feedback. You're right, losing customers would be hard. I've been lucky to have pretty loyal customers, but I probably need to make sure I keep it that way. Thanks for that advice and the rest. Definitely need to think through this more.
Nov 6, 2014
Hi Carrie. I deal with this a lot and especially at annual planning time, like now. I market across a variety of customer segments, all who are differing levels of maturity in terms of value and longevity, with a giant department of 1.5 people. I really believe executing both retention and acquisition programs has to be the answer though because without new customers you'll never extract enough value to last in the long term...and without extracting value from existing customers you can't pay the bills! I use a few metrics to help me figure it out. First, how valuable is an existing customer to me (average order value and lifetime value, etc). Second how valuable is a new customer in terms of initial revenue. Third, how much can i spend realistically to execute on both fronts (total budget). Based on that information (and I'm being over simplistic here) I go about identifying the specific programs (email, seo, dm, social media, etc) and resources ($ and time) I will allocate to individual retention programs and acquisition programs. I always spend more time and resources on retention though. I know it can sound daunting but setting up the initial metrics will help you decide where to spend time and effort, especially when there's only a little time to do it. Hope this helps.
Nov 6, 2014
I'd recommend investing some more time into your existing clients. Put the systems in place that will help you market to them and to your new clients. Once those systems are in place to take care of your existing clients, then focus on getting more new clients.
Nov 6, 2014
Excellent question, which every business needs to address? I do a Marketing seminar on when you are busy or when you are slow every one needs to do new business development on a regular, scheduled basis.
Four good questions:
1. Can you exist and build the business and revenue of your existing clients and customers. Usually that would not be true for the long term. There is a product life cycle for clients. And the marketplace can affect your clients too.
2. Which ones are more long term, existing or new?
3. Which ones are more profitable?
4. Will your product or service mix change?
Here to help. All the best.
Nov 6, 2014
You could realistically try to get your best customers to act as brand advocates and offer incentives for them to bring you new customers.
Nov 6, 2014
Hi Carrie ~
I'm not sure if you saw my response to your last Q about how to turn customers into repeat customers, but much of what I wrote is equally applicable here:
Ask for referrals. This both nurtures existing customers and helps you acquire new ones.
Contact satisfied customers and ask who else might be a good fit for your product, and whether your client could broker a brief introduction; something as simple as a group message to you and their contact, introducing you to one another and suggesting that you might be able to help the other business with their needs. If you like, offer the existing customer an incentive such as a discount on future purchases.
I've gotten some excellent new business from referrals. Keep your original client apprised of the status of the new contact, and be sure to thank them profusely (via email, snail card, maybe even a gift depending on the value of the new account and your budget) when the new contact becomes an account.
Nov 7, 2014
Awesome suggestions! This is a great way to do both at the same time and I really hadn't thought of it...though it sounds so simple. Thanks Amara.
Nov 7, 2014
You're very welcome. Turning happy customers/clients into brand ambassadors is the ideal way to build business in just about any industry. And if they're willing to post how happy they are with your product on social media (and vice versa; you might post about how their business serves their target market) your business could explode. Good luck!
I really like how you are thinking about this. Starting with who is my ideal customer. I haven't spent time on this question in awhile and that might help me better segment my existing customers and those that I can potentially meet at tradeshows. I am going to spend some time on this. Thanks again. Really appreciate the suggestion.