If you own a business, you know that it’s not always easy to convert a lead into a customer. After all of the advertising, marketing, and communication, you may have exhausted a significant amount of time, energy, and money earning their business.
This begs the question: Is pouring all of those resources into a single sale really worth it?
Of course, this ultimately depends on how much the sale was worth and how much you spent on it; but in many cases, you may find that these profit margins are razor thin. In fact, sometimes that first sale ends up being “free”—you don’t earn any money from it at all!
Imagine how your profits might explode if you could increase your annual sales per customer instead. Unlike a brand new customer that requires an enormous amount of effort to convert, an existing customer has already been converted and successfully onboarded. Every new sale, upsell, or cross-sell should deliver a much larger profit for your business.
With that said, increasing your annual sales per customer still requires some effort on your end. Put the following steps to work and watch your annual sales numbers skyrocket!
1. Find Your Top Customers with the 80/20 Rule
The 80/20 rule (also known as the Pareto Principle) is used to assess cause and effect in a handful of areas—including customer sales. It states that approximately 80% of your company’s revenue is generated by roughly 20% of your customers.
The reality is that you may not be able to resell, upsell, and cross-sell to every one of your customers right off the bat. You can, however, target the top 20% of your customer base that is generating most of your company’s revenue.
Then, make a concentrated effort to sell to these customers. Remember, these are the customers that know, like, and trust you most—the people who are most likely to buy from you again!
2. Launch a Frequent Buyer Program
Many studies show that customers are more likely to buy again if there is a program that incentivizes it.
A classic example of this type of program is a punch card you might receive at your local coffee shop or restaurant. Each time the customer makes a purchase, the card is punched, and they are one step closer towards receiving a free or discounted item.
Over time, this strategy can have a powerful effect. As the customer slowly builds a habit of buying from your business, they become more and more willing to part with their money each time.
3. Master the Skill of Upselling
Whenever you’re in position to complete a sale—whether it’s with a first-time or long-time customer—remember that it is always the best opportunity to upsell. You might offer a better product with a higher price tag or suggest a bundle with other products that the customer might need.
Amazon is a great example of this skill in action. Whenever you add an item to your cart, they will usually display similar products that customers have bought and products that customers often pair together.
Mastering the skill of upselling will undoubtedly take some practice, but there are a few things you can do to improve your chances of converting a larger sale:
- Create tiers around your main products and services so that you always have something relevant to upsell.
- Write a convincing script that allows you to pitch other products and services.
- Always stress the benefits of a product or service in a higher tier. Don’t just ask the customer whether or not they want it!
4. Try to Stay Top of Mind
Even when you’re not explicitly pitching another product or service to an existing customer, make an effort to check in with them.
Perhaps it’s by sending a simple email once every few months to see if there’s any way you can help them. Maybe it’s by sending them your monthly newsletter or latest blog content.
Whatever the case, simply keeping the line of communication open will allow your business to stay top of mind. Next time that customer has a need for a related product or service, guess which business they are going to remember first? That’s right—yours!