It’s easy to get carried away with acquiring new clients. After all, the more customers you have, the better, right?
Not necessarily, says Graham L Morgan, small business consultant with Business Doctors. “It is quite common for many business models to have 20% of customers delivering 80% of your turnover,” he says. “It surprises me when I ask a business owner to name their top 20 customers how few actually can. Conversely, many can name the last account they won.”
But nurturing the relationships you already have could be the best way to grow business. “SMEs that take time to really understand their customers and the way those customers’ businesses operate find that they can increase the volumes of goods and services they can deliver to them,” says Morgan.
He suggests researching factors including your customer’s total spend and your percentage of this, whether your products and services fit their supply chain and whether there’s scope for collaborative or partnership working.
Building strong, personal relationships with clients is one of the joys of running a small business. It’s the reason many people leave a big company to start their own operation.
Be proactive
There are three main routes to expanding your trade to an existing customer. As well as increasing the number of items you sell – known as upselling – you could increase the types of product and the number of people in the organisation you do business with (cross-selling).
This might mean identifying other services they need that you could provide. If you’ve sold them web design, for example, do they also need help with branding, brochures or leaflets? Or are you only currently selling to one division of a large organisation? Could you get your contact to introduce you to other people in the company with a recommendation? If you’re dealing with the Kent branch, for example, could you get talking to the West Sussex office?
David Ingram, managing director of digital marketing agency Bring Digital, agrees that nurturing existing customers should form a key part of every business’s strategy. “Retaining an existing customer is far cheaper, and easier, than acquiring new ones. But it requires a lot of care and attention that many simply don’t put in.”
He advises: “Don’t just speak to your customers when they are buying something or when their contract is up for renewal. Be proactive in suggesting ways to improve performance and reactive wherever possible.”
Ingram says knowing when to upsell or cross-sell is crucial. “Anticipate your customers’ needs ahead of time and present them with a plan of attack for the future.
This can involve predicting if any changes in the industry will affect them and advising them on how to proceed, or identifying if they could boost sales through a method they haven’t yet tried. Have they just landed new business or launched a new service you could help with? Have they opened a new office or taken on investment?”
Investigate and adapt accordingly
Really get to know your clients, says Barnaby Lashbrooke, founder of virtual assistant platform Time Etc. “Last year we studied the patterns of our most successful customers and realised they had several things in common – including how they used the service, what they used it for and how they were onboarded.”
Similarities included, says Lashbrooke, “that they worked primarily with one dedicated assistant, consulted us about their needs before becoming a client and that they preferred to communicate via phone or email [rather than social media, for example].”
The company then made several changes to its systems and processes and tweaked how it spoke to its users. “Essentially, we started trying to turn all of our users into our most successful users – to benefit us, but to help our clients succeed, too.”
There’s an important lesson here: help your customers grow and grow with them. This method, says Lashbrooke, has allowed the company to increase average revenue per user by about 20% in the past nine months. He adds: “We’re now doing more to ensure that as many clients as possible turn into successful long-term users.”
Analytics could also point the way. Timing can be crucial, says Doron Cohen, chief executive of cross-border business payments service Covercy. “All our customers have different needs as we handle a lot of transactions. For example, some make payments daily while others make them monthly.
“As we’re online only, we rely heavily on our analytics to spot potential upsell opportunities with current clients based on their behaviours when using Covercy,” he says. “Doing this has enabled us to actually forecast when our next chance to upsell arises.”
Try it yourself
- Identify other departments within your clients’ organisations and ask for an introduction (cross-selling)
- Increase the number of products you can sell to them (upselling)
- Use analytics to determine how your clients behave and how best you can capitalise on this
- Anticipate your clients’ needs and suggest ways in which you can help them grow
Content on this page is paid for and provided by Hiscox, sponsor of the Adventures in Business hub on the Guardian Small Business Network.
