When it comes to business and revenue growth, existing customers are a powerful influence on organizations, especially in terms of generating sales and increasing profit. According to Totango, 48% of companies report getting 60% or more of their revenue from existing customers. That's a sizeable part a company's financial success, and one of many reasons why companies are increasingly focusing on selling to current customers.
Unfortunately, selling to current customers isn't always easy. Just because a customer purchased from you once doesn't mean they're planning to do it again. Add to this the fact that most sales people have more experience bringing on new customers, and are less familiar with selling to their organization's existing customer base, and you have a challenging situation.
The challenge and experience gap often causes sales teams to make mistakes that can cost you revenue and even harm your company's relationship with your customers. Here are five of the most common mistakes sales people make when working with their existing customers, and how to avoid them.
One of the biggest advantages of selling to existing customers is the amount of data you have on them. Current customers' relationships with your company should be documented in transactions, conversations with support, online activity, and emails. Not researching and making the most of this information is a critical (and easy to correct) mistake in the sales process.
Your customers' behavior on your website, on social networking, and in your customer community gives you much more rich information about your customers than you got with traditional crm data. You can use customer activity data through the entire sales process, from qualifying customer leads to post-transaction conversations, so be thorough when researching. Look at what emails received a response from your customers, what discussion forums they're participating in in your online community, and what products they purchased in the past. Use this information to tailor future conversations.
Just because you have a database full of names doesn't mean you should sell to all of them. There's a fine line between offering sales-ready customers the opportunity to make a purchase and annoying customers who aren't interested in buying additional products and services from you at this time.
To avoid this mistake, use the customer activity data from your research to qualify leads. Identify which customers are sales-ready, and which ones are happy with the products they already have.
Contact customers with activity data that's full of buying signals, such as watching videos, participating in discussions, or browsing content about new products. Leave customers with no buying signals, who aren't interacting with you organization or expressing interest, to your account management and support teams. Trying to sell to these customers will likely waste your time and effort, annoy them, and potentially damage your overall relationship.
Making the wrong offer happens when sales people either don't research their customers or don't pay attention to the information they have on customer interests.
For instance, if you're a cell phone company, consider a customer who writes blogs in your online community about how to use your expensive smartphones in business enterprises. You don't do your research, so you offer the customer a $20 branded media package. Not knowing about your customer's interest in smartphone uses, caused you to not only chose the wrong type of offer, a cross-sell, but the wrong product at the wrong price point as well. Chances are your prospect isn't interested, and you just wasted both their time and yours.
If you do your research, then you'll have information that helps you understand what products your customers are interested in, as well as past purchases and their price constraints. Use all of this to make right offer, taking into account your customers' future needs as well.
Customer activity data shows that this customer writes about your smartphones and how to use them. What can you offer to improve the smartphone that's near the same price point? An upgrade to a newer phone? An add-on that provides more functionality? These are the right offers to consider.
Even if you've narrowed your prospect base, done your research, and found the right offer, you're still going to lose the sale if your sales messaging is out of alignment. All the common pitch mistakes apply here, including being pushy or impatient, and not listening to your customers' challenges, objections, or opinions.
Don't assume all objections are only about price, and be flexible enough in your pitch to change your responses based on what customers tell you. If you thought your customer needed a new computer, but they express frustration only with their software, change your offer accordingly and then clearly explain how your new offer solves the customer's problem. Explaining the solution your product provides shows the value of the purchase.
Most importantly, be honest and clear about your organization, product, and sales terms. Tricking customers into buying with misleading information creates ill-will, potentially ruining your relationship with the customer for life. And, since you're talking to existing customers, you'll not only sabotage your chances for future sales but will hurt your organization's customer satisfaction and retention rates as well.
This can be a problem with most sales interactions, but it's an even bigger issue when selling to existing customers. Why? Because any time you sell to your organization's current customer base you're blending sales with account management, customer satisfaction, retention and everything else that goes into getting and keeping customers. It's easy for customers to feel unappreciated if you don't follow up.
To maintain a strong relationship with your customer, follow up regardless of whether you close a sale or not. For successful sales, check in to confirm your customer is satisfied and enjoying their product. When you fail to successfully sell something to an existing customer, give it some time. Then, reconnect to make sure your customer is satisfied with your last conversation, past purchases, and your company as a whole. This makes them feel valued and also gives them a chance to think about their challenges, change their mind over time, and eventually be open to learning about additional products and services.
To avoid these common mistakes sales people or account managers need to change their approach and focus not only on selling, but also on strengthening relationships and gaining a deeper understanding of their customers.
Using customer activity data from transactions, online community platforms, and emails to learn about customers is an integral step, and improves the chances of closing a sale. With experience, sales teams will get to know of their organization's current customers and how to target the right customers with the right message.