Would you like to make more money with less effort? Who doesn’t? The question is how. You’ll be surprised to find that the answer lies with the customers you already attract.
With the biggest marketing cost for most firms being acquiring new customers, you need to serve and profit optimally from the ones you attract. This requires looking at your business in fresh ways. Are your customers making the fullest and best use of your products and services to benefit themselves and your business?
In the rush to add more customers, many businesses overlook immediate opportunities to increase profits with their current customers. For example, Matt wanted to grow his profitable thirty-person law practice. So, he focused on more and more advertising to draw clients into his firm. It became a strain, however, to offer more seminars and initial consultations to gain new clients.
The following are some of the steps we took with Matt’s practice to shift focus to delivering more value to his existing clients. He discovered many profitable opportunities had slipped through his firm. Instead of adding more volume of customers, Matt plugged the holes in his marketing to the clients who already showed up. Whether you sell products or professional services, you can apply these steps to reduce your hassles and double your profits.
Develop clear measures of what customers need.
In order to find out what you are missing, you need a good measure of the potential. Matt’s team developed a checklist of what clients might need. For each new client, the interviewing attorney noted what the person needed and what would be the best package of services to optimize value for the client. This gave both the client and the firm a measure of potential.
The firm recorded statistics on the dollar value of both the proposed and accepted services for each client. For the first time, it could see by client and by attorney what the potential might be for the practice.
Analyze the gap between need and purchase.
How many of your customers’ potential needs do you fulfill? What explains why some clients adopt the complete recommendation and others only part? Is the value clear? Is the marketing attracting prospects with the ability to pay? Are the members of the firm effectively presenting the value, strongly recommending the benefits, and asking the customer to commit to a full package?
Matt discovered a wide variation by type of service and team member. Some services and the team members who presented them realized over ninety percent of their recommendations. Others fell at sixty percent or less. The average was about seventy percent. With the high costs of marketing and enrolling new clients, two thirds or more of the incremental revenues from clients would go directly to the firm’s bottom line profits. They concluded that if they could fill just half of the opportunities they missed in serving current clients, they would double their profits.
Improve features and packaging to boost value.
Look for ways to enhance the value of your products or services and your customers’ perception of them. Through structured customer interviews, Matt clarified the value that clients wanted. The team modified some service features and revised how it packaged them so that prospects better understood the value.
Train team members to present your value attractively.
Your team needs to master both the science and the art of presenting and closing sales. Matt paired his best presenters and closers with those whose statistics showed that they struggled. We used the proven “see one, do one, teach one” method. The best team members showed others what they did. Then those improving their skills tried their efforts with the experts present to advise and coach them afterwards. Finally, those who recently improved their skills taught others what they learned.
With clear feedback statistics and a strong motivation to improve, each person improved his or her results. Where results fell below needed levels, team members rotated to other jobs.
Track and enjoy the results.
Regularly review the results and celebrate the successes. Matt reviews his firm’s statistics at each monthly team meeting. Participants discuss what is working and what’s not and share best practices.
You can multiply your profits with the customers you already have. Put your team to work to figure out how.