Nobel Prize winner John Nash helps us to understand why we need to change our perspective with customers.
Finding new customers and sales opportunities is one of the most difficult and challenging activities that companies and professionals have to tackle. In our courses and when providing consultancy the question “How can I increase my sales?” is one of the most common, associated with “How do I find new customers?” To answer both, we need to reflect together on new business strategies that we can implement within our business model.
Vertical growth and horizontal growth
Finding new customers is not the only new business strategy, nor the most effective, especially in certain conditions. Actually, it could be very expensive and dispersive to enlarge your portfolio of contacts horizontally by looking for new customers, as your efforts will be split and this might create stress on your sales structure, to the point of worsening its performance. This is why we recommend you first consider the customers you already have when looking to generate new business.
You might focus on those who have already purchased your products and services, even sporadically or with just a first timid order, to increase sales vertically.
So, we are talking about activating tools to build loyalty rather than wildly committing sales staff on “door to door” sales. Creating loyalty and finding new customers from scratch, are two activities that involve very different negotiating modes. If you are in any doubt just look back over our article discussing cold calls. But how do you choose whether to grow horizontally by finding new customers or vertically by building loyalty among those you already have?
To each his challenge
The healthiest way to select between one strategy and the other, is to analyze your customer base. If your analysis indicates that your customers still have buying potential to express, the most obvious path to new business is vertical growth, but be careful, you’ll also want to consider your offer system and ask yourself if you have something more to offer to a customer that you already serve.
If your product range is limited or has a longer life cycle, you will struggle to sell something more.
For example, if my company sells industrial machinery that has a life cycle of 10 years, how can I build customer loyalty by keeping the relationship alive and active while waiting for a new purchase? I might be able to sell spare parts or broaden my range, but such options may not be easily achievable. Alternatively, I could focus on increasing the quality of after-sales services. There are other factors that might suggest either horizontal or vertical growth, such as the inclinations and attitude of the sales staff.
To grow vertically you will need specialists who are more skilled in consultancy than traditional selling, while you will need skilled negotiators to grow horizontally and find new customers.
Diving head-first into sales
Whatever your new business strategy, however, you must dare if you are to grow … without agonizing too long! We should remember that “things are easier said than done… but there is no harm in trying”, is a saying that many salespeople who are subject to a series of prejudices on finding customers, often forget to put into practice. “We’re in the middle of a crisis, it’s about survival, not growth!”, or “Customers are a breed in danger of extinction; there’s not much hope of finding new ones” are statements we hear repeatedly. Remember the negative impact of self-fulfilling prophecies and you will understand how important it is to keep an open-mind and a positive attitude when looking for new customers. It certainly helps to have a work method and for this, you should read the page of this blog dedicated to sales ethics.
Last but not least, we suggest that one of the most powerful tools to trigger the new business is to build a positive reputation that will encourage word-of-mouth recommendations that then attract new customers to buy from you and old customers to remain with you. Focus on your personal branding and remember that a company is about people:
Every one contributes to the image and maintains the reputation of the organization to which they belong.
Make sure that those who work with you are the first to speak well of the company and involve everyone, regardless of the level to which they are involved in sales, to play an active role in consolidating references and sales opportunities. As in many businesses and personal situations, when looking for new business you will win or lose together. Bear this in mind.
Note: our Master Class, dedicated to accounting, marketing and sales, is going to start in a few weeks. Please visit this link for more information.
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