Pearl diver of new customer acquisition
About a hundred years ago, there were still pearl divers who did nothing but collect clams all day long, hoping that there would be a pearl in them. This activity was very tedious and dangerous.
Until, by accident, somebody pushed a grain of sand into a slightly open shell, closed the shell, and gave her enough time. The result: a pearl grew out of it. These were the end of pearl diving and the beginning of pearl cultivation.
How to free the sales success from chance
What does this have to do with sales? Well, diligence is a basic virtue in sales, but also in the economy systematics can be implemented, as in the Perlenzucht. Many people in sales define their success according to the formula: growth = new customers.
This is also true for many industries. But not for everyone! Anyone who sells prefabricated houses to owner-occupiers can only grow through new customers. There are industries that usually only conclude “one-off transactions”. For these providers, new customer acquisition is the basis for growth. But the situation is different for most industries:
Systematic shortcut to success in sales
The basis is the formula 1 - 3 -> 7. It costs you 1 factor of time, effort and money to hold a repeat customer, to bond with them and to realize their potential. At least seven times it costs you to acquire a new customer.
Even if you gain new customers through active and passive referral marketing, it still remains at least factor 7. In between, there are two other customer segments: on the one hand the departed or lost customers and on the other the slumbering customers or sleepers.
Use the potential of existing customers
It costs you factor 3 to exploit a customer with whom you are a “sub-supplier” to greater potential. The customer knows you. There is already a “supplier connection”. He trusted you before. But with most of his needs, he satisfies another partner.
Now it is much easier to activate such a slumber customer than to acquire a completely “cold” contact. Find the conversation and clarify the conditions under which the customer is willing to do more with you. The customer often does not even know that you can also offer some products because you have usually not fully communicated your performance.
A study by Deutsche Post has shown that companies in Germany lose between 24 and 27% of their customers annually across industries. Customer recovery is also in the range of factor 3. Even if this is emotionally incomprehensible for most sellers.
The majority think that it is easier to convince a “virgin” new customer than to shovel “scorched earth” away from an ex-customer. But this is a mistake in thinking: The ex-customer once trusted you. Otherwise you would never have done business with him. Now something "got in the way" that keeps him from going on with you.
3 reasons for losing customers
There are three reasons for the loss of customers:
- The customer dies or the company closes. Recovery does not make any difference here Sense.
- The competition "poached" your customers.
- You angered the customer, and he decided not to buy from you anymore.
Search contact to the customer
At points 2. and 3. It makes sense to seek direct contact with the customer - immediately and ideally by phone or in person. Please do not write letters! Clarify what the problem is, solve it and define under what conditions the customer is ready to work with you again. An empirical value: the faster you register to break off the relationship and the faster you respond, the higher your recovery rate.
If you are looking for customer contact for months, then they are often no longer ready to switch. Then he got used to the procedures and processes of the new partner. As a manager, you should pay particular attention to dropouts in sales. Many salespeople simply “don't dare” to start the conversation and to rescue the situation. Studies have shown that 95% of the customers who you can reactivate will later become very loyal regular customers and are almost resistant to attempts at enticement.
Up- and cross-selling
But factor 3 is secondary. First, it's about factor 1, customer loyalty and the potential exploitation of existing customers. Let us observe this with an example: you sell insurance. How many insurance companies does your customer have? How many of them? Which ones are missing or make sense from your point of view? Analyze the overall potential of your customers and unlock the potential:
- Upselling, ie longer terms and / or higher sums insured under existing contracts.
- Cross-selling means additional products. In the sense of “Customers who bought A were also interested in B, C and D”. Your aim should be that you can cover at least 80% of the customer potential with your offer. Why only 80% and not the full potential?
Well, if you get all the potential from the customer by yourself, because he wants to focus on you, then: Congratulations! But often the effort to push the last one from the race out of the race is in no relation to the yield. Some customers just do not want to put everything on a map.
Do you really know the potential of your customers?
Incidentally, my personal experience is: Very few sales people know the real potential of your customers. I'm talking about “knowing” - not “guessing”. But without the exact “knowledge”, real exploitation of potential is not possible. Therefore, create a checklist around the potential determination and work through it with your customers. So you can be sure that you have really addressed all topics and products.
So if you are already in your market for some time and have a certain customer base, then an intelligent market development according to the formula 1 - 3 -> 7 is your systematic shortcut to success!
- Know and raise the potential of your regular customers.
- Reactivate your ex-customers in a timely manner.
- Win the potential of your snooze customers.
- And only the fourth step is the acquisition of new customers!
When acquiring new customers, it always depends on the right method. Methods are customer approaches such as telephone acquisition, mailing, search engine marketing, referral marketing active and passive and many more options. But beware Professor Pinczolits from Vienna has determined that the “wrong” method causes up to 20 times the cost and effort.
Henry Ford is said to have said: “Half of the advertising costs are wasted money. Unfortunately we don't know which half. ” It is similar in the acquisition of new customers: It is worthwhile for you to take a critical look at which acquisition channel really leads to new customers and corresponding sales for you. Systematic sales controlling really makes sense here.
The formula 1 - 3 -> 7 may also mean for you that you may not be starting any activity or investment in attracting new customers over the next two to three years. And then you do not have to have a bad conscience. With the factors 1. and 3. you have fast successes, with lower costs and no acquisition frustration.
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