It is often said that in business 80 percent of your profit will come from only 20 percent of your customers. And yet many business owners focus most of their time and resources on attracting new customers instead of building relationships with existing customers. By concentrating on providing your current customers with more value, you can decrease your workload, improve your results, and get more business. Plus, the cost of attracting a new customer is six to seven times more than the cost of retaining an existing customer. A recent article in the Toronto Globe and Mail — 3 Keys to Success for Entrepreneurs — discusses the benefits of getting repeat business from your best customers, along with two more keys to running a successful business.
The article suggested packaging your services into long-term contract or retainer packages, as they can “even out your cash flow, reduce your sales and marketing time and build long-term, value-packed relationships with your clients.” Other ways that you can develop more profitable customer relationships include:
- Looking for hidden opportunities: Once you get a retainer with a customer, you’ll probably find more leads. Your customer might introduce you to others who need your support, or you may get first notice of new projects and opportunities.
- Cross-selling or upselling your customers: When a customer makes a purchase — whether online or through a sales representative — you can introduce them to similar products or add-ons. These easy sales can greatly increase your revenue.
- Keeping in touch: One of the best ways to get more business from your customers is to stay in touch. This will keep you top-of-mind when they have a need you can address. You should also make your customers aware of your additional products or services. Chances are, your customers aren’t aware of all the benefits that you can offer them.
What about you? What strategies do you use to build relationships with your customers? Feel free to share your comments and questions below.
For more information on how to improve customer loyalty without a massive marketing budget, read The Secrets of Building Profitable Customer Relationships.