Are you neglecting the opportunities that exist in your current customer portfolio?
I've done a lot of work over the years with client's who recognise that there is a wealth of opportunity and profit hidden away in their current customer portfolio. Through a blend of training and management focus, we have been able to unlock this potential and add significant profit to the bottom line.
How have we done this?
First of all, we need to do some analysis on where the business is coming from. By looking at the average spend of a customer and benchmarking all customers against that figure, we get a clear picture of who is contributing and to what level. Without exception, I have discovered that every company I have worked with has 20% of their customers contributing above the average spend line, giving 80% of that company's revenues, give or take a few percent. This is a potentially dangerous mix as too much turnover is focussed in a small group of customers. What if the business lost a few of these? It would be highly damaging.
As a result, 80% of customers fall below this average spend line, contributing only 20% of revenues. This means that a lot of account management work is going into a large number of customers, who are only providing a small amount of income, damaging the profitability of each account.
So, the goal to change this is created. We need to move more customers above the average spend line, thus reducing the risk and making more of our customers more profitable.
The next stage is to benchmark customers against each other, working out what each one buys and comparing it to similar customers. This will help us to identify the 'white space', those products or services that are not being purchased, but it is logical to assume are being purchased elsewhere.
Finally, training and management focus is brought in to help the sales team to target these opportunities through well constructed conversations with their customers, aimed at gaining the opportunity to pitch for the missing business and close it.
We know it is far less expensive to sell to an existing customer that to bring in a new one. If there is opportunity within your existing customer portfolio, you will become more profitable and more secure by putting the right focus on this area and implement the activities required to unlock it.
If you would like to know more about how Sure Train can help you with this, get in touch via the website - www.suretrain.co.uk