The probability of selling to existing customers is 60-70 percent, and the probability of selling to a new prospect is only 5-20 percent.
Master Sales Series is back again; we are reviewing the benefits of marketing to existing customers. As sales professionals, we put a ton of effort into lead generation, but we miss out on opportunities by ignoring the customers we already have. We will go through these five steps:
- What are the benefits?
- Before you sell – re-discover
- Marketing to customers in the retention stage
- Marketing to customers in the advocacy stage
- Onboarding at every stage
Studies show 65% of a company’s business comes from existing customers, but most only spend 21% of their marketing budgets on customers they already have. It’s so important to redirect some of our time and effort towards customers who already see the value. They will thrive, and so will you.
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Hey everybody, how are you today? I’m George Leith, it is another edition of the Master Sales series. And today we are going to conquer a great topic, the benefits of marketing to your existing customers. You know, we talk a lot about acquiring new customers, God, that’s expensive and challenging. We do have existing customers. And what I’ve found is a number of organizations completely forget about marketing to their existing customers, probably because we’re dealing with them every day. I’m gonna give you some reasons why you might wanna consider deploying some of that marketing budget and effort against your existing customers today in this edition of the Master Sales series.
We need to understand that retaining and upselling an existing customer not only is easier, but has less cost than acquiring a new customer. We still need to do both by the way, it’s not like you can get out of jail free and don’t have to do prospecting anymore. We will have attrition in our existing customer base, it just happens. But what I’m telling you is, there are a number of benefits around paying more attention with marketing efforts to your existing customers. Your probability of selling to an existing customer something additional is between 60 and 70%, and it makes sense because you have built an enormous amount of trust. Keep in mind, rapport and trust are the same thing. I don’t think you get to trust without rapport, so you need to build that rapport, and then as you build trust, it’s not something that goes away, it’s actually something that you need to continue to make deposits into. So there are things that will happen that will erode your trust. If you deliver a product or service that didn’t meet the expectation that you set presale, that could erode the trust that you built with the customer. So what we’re assuming in this discussion is that you have a high level of trust with your client, the things that you have sold are performing well or exceeding the expectations, and now you need to take that and leverage it for additional value to that customer. And by delivering additional value with other products or services, guess what happens? We receive more profit because what we’re in the business of is solving people’s problems for profit.
Working with Existing Customers
: The ins and outs of the customer that we’re already working with, we already know those, we know their name, we know the people on their team, if we’re really doing our job properly, we are, I like to call, embedded in their organization. We are working with them on a daily basis, weekly basis, monthly basis. By the way, this whole idea of I can go check in on my client once every eight months, I just don’t think that’s gonna work out for you. If you’ve got a client paying you on a regular basis and you’re not paying attention to them, guess what’s going to happen? They will leave you for a competitor. This is one of the key compelling reasons why you would want to ransack some of that marketing budget against your existing customer base, because every single competitor that is out there is running their biggest spend to try and attract that customer. So you are facing a nuclear weapon against you, and all of your competitors are putting all of their heat on that client and they’re trying to chip away at you. So you probably should put some marketing effort against that.
The other thing about putting marketing effort against existing customers is by running nurturing campaigns or using big rock content, which we’ve talked about with our head of content, Dan McLean, I’d like to just use that to acquire a customer. Wow, what a waste, because what you need to do is constantly be driving adoption of the things that you’ve sold to that client and potential upsell. So the content that you are building to acquire new clients should be used on your existing customer base.
By the way, the probability of you selling to a new prospect is between five and 20%, we all know that, we’ve got to get nine nos to get to a yes. And the why do we count the nos? Because I just want you to expect the nos. It’s a scientific data proven fact that you were going to get a number of nos before you get a yes in the acquisition. Now with the existing customer, you know that organization very well. So one thing that you’d like to understand is, when are they going to buy? How much more could they spend in their budget? Because we’re really getting to know that client well. And are they motivated by a discount? Or is there the ability to bundle it in with what you’ve sold today to add value and get an incremental increase of spent?
The Unconsidered Need
And then there’s this thing that Tim Rister, a Conquer Local alumni has told us a number of times on this show, the unconsidered need. What I find is salespeople are so excited to move to the new thing, “Oh, we’ve got this new thing. I’m gonna pitch it to everybody.” And maybe that new thing is the unconsidered need, where you have way more ability to present that unconsidered need that maybe is a little blurry of a concept after you build that trust and rapport and have delivered on some of the solutions that you sold in the first sale or the second sale. So keep that in mind, this might be where you would deploy that unconsidered need, it’s in your toolbox.
You don’t bring it out to acquire the customer because you haven’t really found the need fit. The product team is yelling at you, “Go sell this new thing, it’s amazing.” But you might wanna deploy that unconsidered need later. Now, as we start to know that client and as we start to build brand equity, I like to call it, we build them into a raving fan. We have the ability now to start challenging them. And we actually owe it to that customer. In fact, what I’ve found, the customers that I really build the best relationships with are the ones that I tell them what they don’t wanna hear sometimes, but they need to hear. And this is an important piece to the puzzle where we start to really understand the business, and things are going great and we’re making good money on that client. They’re spending good dollars with us, they’re finding value and we’re making a good margin on it. And I find a lot of salespeople are like, “I don’t wanna upset that apple cart, I’m just gonna stick with what I have today.” And what happens then is you leave the door open for them to find it from a competitor.
Being an Innovator
George: A competitor comes in and looks to be more innovative than you, because you’re still selling the same package to them that you sold to them 14 months ago, there’s been no innovation to it, there’s been no addition to it in value. And what will happen, and you know this, by the way, when have you left somebody that was really doing a great job with you and you start working with another company and then you think to yourself, “Well, why did I leave that other company?” And it was like, “They didn’t bring me anything new. I would just spend in the same money.” And eventually what happens is, when you deliver that amazing value proposition to earn the customer the first time, they get memory loss and they forget about that great pitch that you delivered the first time. And now you’re just the person that phones once a month to check in. That’s why I don’t like the idea of, “Hey, I’m calling to catch up.” Okay, I don’t need to catch up with you, it’s a commercial relationship. I’m paying you a fee. Every time that you go on a call to service the client, you should be bringing additional value. And if we have delivered a marketing message the weeks before by email, maybe we actually even mailed them, a nice little box, with something that people really enjoy getting mailed by the way, don’t underestimate snail mail. Or we’ve ran some advertising of a new product or service, and we’re like, “Ah, you know, Colleen is already spending 500 bucks a month on me, I think I’m tapping out her budget, I don’t wanna offer her this new thing, I just don’t want to upset the apple cart.” And what you are leaving yourself open to is somebody else to come in there and eat your lunch.
Becoming the Trusted Expert
Now, 92% of people trust recommendations from somebody they know, that’s a data stat. So you’re building brand equity, you are becoming the trusted expert or you are the trusted expert. You’ve dealt with that client for 18 months, things are going great. I believe that you have a moral obligation to that customer of yours to continue to help grow their business, to continue to offer them new solutions so that they can win the battle that they have against their competitors. I also think that folks that are just, “Yeah, everything’s going great, just let it go” are lazy. Like you owe it to your client, they’ve been good enough to trust you in the first place, to take the leap of faith. They’ve been good enough to pay their frigging bills on time.
Don’t you owe it to them to continue to bring them innovation to help them grow their business? I’m not just talking about the fact that you have an advocate there, they love you. I’ve found that salespeople, when I’m speaking to them, we’re doing a one-on-one, and we’re talking about their book of business, they’re like, “Nope, everything’s going good with Brent, I’ve talked to him about that.” And then you listened to the call or you pull up a wing man recording and you can’t find anywhere that they talked to him about that product or service. But the rep is nervous, they don’t wanna upset the apple cart. And it’s okay, I get it. You worked really hard to get $750 a month when you first made the sale, but things change, maybe they’ve had a great year, maybe they’re prepared to invest more dollars into their budget for whatever the hell it is that they’re trying to do. So I think it’s that idea of, and I hate this, and I’m really going to push this in season four, needs analysis is not a stage in a funnel, needs analysis is something you do every single day if you are a professional salesperson, you’re always looking for ways to help that client. And you know what? It doesn’t have to be you that sells it to them. If you see a problem, like maybe you’re at the business, you go into the restroom and they’ve got some really bad old thing on the wall that you use to wipe your hands, and there’s some new thing that you know about like the Dyson thing, where you just put your hands in and it dries it, you don’t have to touch that, and you don’t have to kill a tree. And you say, “Hey, I’ve noticed a lot of places that you compete with have the Dyson.” You don’t sell Dysons, but you make a recommendation that will improve that business, you are the advocate, you have an obligation to that customer. And it’s not always about the upsell, and it’s not always about more commission, but it is about making sure that that client is able to compete. And what you’re doing is you’re protecting the base revenue that you have, you’re protecting the base subscription.
Onboard for Success
: The other thing is this onboarding thing where we onboard the client, isn’t something that just happens after the first contract signing. We are constantly looking to make sure that they are adopting all of what they need to be successful. You notice what I said there, all of what they need to be successful, and that might change over time, so you’ve got a big offering, you have numerous deliverables inside it, and some of them, you just don’t deploy out of the gate because the client isn’t ready, the market isn’t ready, but you need to constantly be innovating for that customer’s benefit, because keep in mind we need to have that lens, really smart sales trainer that I had early in my career, Jim Blendell, I’ll never forget this. He’s trained a lot of folks in the Canadian media space over the years. He said being the trusted consultant is like landing a plane. And he was a pilot, and he was articulating to us that, when you land to plane, the first thing they teach you when you’re with the instructor and you get the yolk for a little while, whatever it’s called is that when you go to land, you don’t look at the ground because you will crash, you look at the horizon. And that’s what outcome-based selling is all about, is talking about that horizon and looking down the road. So that is around adoption, that is around selling the outcome, that is around always bringing that value.
So what I’d like to leave you with today in this episode of the Master Sales series is these data points. 65% of a company’s business comes from existing customers but most only spend 21% of their marketing budgets on customers they already have, it is staggering. Couple million dollar budget, and it is all spent on people that you don’t even know if they’re gonna become customers. We need to pay attention to the business that we have today. We need to retain it, we need to expand it. And we have a much better chance of doing that because we’ve already went through the rapport building process, the trust building process, we’ve been in the trenches together. We really understand the customer too, that’s the other thing, when we’re at top of funnel and middle funnel and we’re just starting on that first contract, how much do you really know about that client? About enough to get the sale done usually. But after we’ve been working with them for months, we’re starting to understand. We understand their street level sales team, we understand the way that they’re monetizing their product offering, we understand the way that they deal with their existing customers and maybe they don’t even have this idea of an acquisition motion or a retention motion. And that’s when we really can start to deliver other solutions, please don’t be afraid to do a job.
Please don’t be lazy, because that customer that has trusted you for the last 14, 18, whatever the number of months is with a regular spend, we owe it to them to continue to innovate, to continue to bring other solutions because everyone is doing business, and probably one of the most competitive environments we have ever faced in the history of entrepreneurialism. So be that trusted expert, but don’t just be it to get the sale and then disappear into the ether. Be the trusted expert every single minute that you are in this industry. Thanks for joining us. Another edition of the Master Sales series. My name is George Leith, I’ll see you when I see you.