In search of additional revenue, businesses often go off into the unknown, chasing new customers and forgetting about their existing customer or client base and its vast untapped potential.
Meanwhile, doubling your income by closing additional sales with customers already loyal to your business is not only doable but easy and repeatable.
This article will look at some strategies that are deceptively simple but effective nonetheless. They will help you...
- Significantly increase revenue by tapping your existing customer base
- Deliver better value to your most committed customers
- Re-connect with your clients and increase their brand loyalty and engagement
1. Let the people decide
Want to know what new products or services your customers are willing to spend their money on? Rolling out a new offering is always a risk—unless you can somehow ask people directly. And that's exactly what companies are doing online, across various industries.
One of the signature examples of this strategy is the introduction of the pizza cake by Boston Pizza. Can you imagine the kind of marketing scrutiny this decision would have taken just 10-15 years ago? The focus groups, the feasibility studies, the anguish of corporate strategists...
Now it's as easy as hosting a community vote to decide on a new product. Customers get something they feel excited to buy, businesses enjoy a significant increase in revenue—everybody wins. What's not to like?
How you can use it: Ask your customers directly what new stuff they want to see from you. Create a survey and let the free market research flood in. Makers of informational products do this all the time, but you can adapt the approach to any business.
2. Work to maximize lifelong value
When money changes hands for the first time between you and a customer, it's only the beginning. Smart companies know that a client's lifetime value increases with each new purchase. Keeping customers for life is what drives the profits—not the ability to attract new business all the time.
One of the best ways to get customers to stick around is to provide them great value at little to no cost. The more you invest in their long-term success, the more loyal clients will be.
Free upgrades, complimentary products, amazing free services that make them feel important—all of these separate your company from the competition in the client's mind and make the next buying decision a foregone conclusion.
How you can use it: Encourage and reward long-term relationships with clients. Make buying from your company for the first time easy, or give something for free. Show clients that you are committed to helping them by offering great service.
3. Be smart about up-selling and cross-selling
Up-selling and cross-selling are the easiest way to generate additional income streams without acquiring more clients. There isn't a business model in existence to which this approach can't be applied. For example, website hosting companies generate additional revenue by offering paid cloud storage, domain registration, identity protection, and other services their customers might need.
Moreover, let's not forget that a client's needs grow and evolve with time. A smart businessperson anticipates that and welcomes an opportunity of increased profits.
Upgrading to a better, costlier service offering or switching to a long-term (e.g., annual) payment plan are all options you can explore when dealing with long-term customers.
How you can use it: Can your customers benefit from a product or service closely related to what they are already using? Or might they be interested in an upgrade that costs more but represents better value with respect to their needs?
- McDonald's employees always offer you a drink or some fries with your purchase.
- IKEA will soft-sell delivery and furniture assembly as additional services.
- Gyms thrive on offering annual or even lifelong memberships.
- Online marketers earn more by creating enhanced, premium versions of their content.
You get the idea. If you can't think of any up-sells or cross-sells to add to your company's offering, you need to try harder.
4. Keep the customers informed
More often than not, clients come and stay for a specific service or product. They might be unaware about everything else your company does. Sometimes, providing information about everything else you sell is all it takes to encourage customers to purchase again.
Every company has revenue streams that are under-performing; sometimes, that's because of lack of awareness on the part of the customer—like a wonderful restaurant dish that is hidden away deep in the menu and goes largely unnoticed.
Now, you can be the stereotypical "grumpy chef" and complain that nobody buys your underrated masterpiece—or you can be the considerate business owner and point customers in the direction of the hidden gem.
How you can use it: Keep customers in the loop about new offerings, as well as existing products and services they might have missed before. For example...
- Airlines keep clients posted about the full scope of their destinations.
- Chain restaurants encourage patrons to eat at different locations.
A similar strategy can be applied to service-based businesses:
- Wedding photographers often offer less popular options of on-location or studio shoots.
- An interior decorator will gladly apply himself to making an outdoor location more beautiful.
The key point to remember is that awareness about an option makes customers more inclined to buy. Even if clients don't take you up on the offer immediately, they will be more likely to do so in the future.
5. Pitch + Timing = Sales
For most businesses, there are times when the profit potential is maximized. The holiday season is a veritable goldmine for restaurants, airlines, hospitality industry, and others; children's wear sells like hotcakes before the school year begins (as does stationery).
If your customer base is more likely to buy at some specific time, you can easily earn double the normal revenue by getting a well-timed pitch out there.
How you can use it: Be creative. Think about meaningful seasons or dates that influence your customers' buying decisions. It can be done even if you sell services, for instance:
- Personal trainers will swim in money after all those New Year's resolutions are made.
- Accountants love the months leading up to Tax Day.
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Although marketers nowadays have more outreach than ever, the cost of acquiring a new customer remains high. By definition, repeat business is much cheaper to secure, and you can rely on it for predictable, lasting revenue.
Note that none of the above-listed techniques is designed for a quick cash-in that will, ultimately, hurt your reputation and erode customer goodwill. No, it's all about encouraging people to buy more and love every minute of it.
Can you think of any other ways to increase revenue from existing customers? Feel free to share them in the comments!