#SeriouslySocial - The Radio Show
The Humanistic Approach to Sales and Marketing
Join Simone Douglas for the third IBGR Network – Results Radio segment of The Humanistic Approach to Sales and Marketing.
Week three of your seriously social journey, a path that changed the way I do business forever and whose benefits regularly surprise me in terms of the opportunities they generate. One of our biggest challenges is the balance between selling to the new and servicing the old.
It is easy to get distracted by all the noise in the business world at large but jump day is your chance to settle in and work on your business in ways that allow you to make the most of your opportunities today, tomorrow and forever.
One of the challenges in an established business as you continue to scale is finding that happy medium between servicing the existing clients and maintaining those relationships and acquiring new clients that help you to continue to grow. In today’s show we take what we have covered in the previous episodes and evaluate the challenges and opportunities in getting this right.
IBGR is committed to your success and our programming is designed to give you the tools and resources as well as the one percenters you might be missing that are the difference between feeling like you are treading water and chasing your tail versus on the up track and master of your domain..
Have a fantastic week, hopefully we have turned your hump day into jump day and you are all fired up for success.
Show Objectives – The Why
Striking the right balance between new and existing customers can make you a happy camper – or leave you running in place. The reality of most businesses is that investment in acquiring new customers comes at the expense of nurturing relationships with existing ones, and vice versa. Herein lies the great importance of optimizing the company’s new-to-existing customer revenue ratio, what we call the “customer revenue mix.”
Key Issues – Owner Perspective:
- What is the ideal revenue mix between new and existing customers?
- Is there a correlation between the customer revenue mix and a company’s success?
- Customer retention strategies versus acquisition strategies
- Handing over key accounts as you scale
- How to balance your sales time between prospecting and nurturing
What You Need to Know – The What
- Analyzing your customer ratios
- How does your mix balance against your stage of evolution as a company
- What retention and acquisition strategies do we have in place and what are we missing
- What is our process for our customers journey with our team
- Balancing resource allocation and automation to keep everyone happy and maintain growth..
What You Need to Do – The How
- Basic customer ratio calculations to health check your exposure or opportunity.
- Complete review of resource allocation to account management versus acquisition
- What are the touch points we maintain with our existing customers personal and automated? Are we actually executing them or did we just put them in our strategy document.
- Identify who has the best retention in the organisation and why
- Identify who has the best acquisition ratio to lead and why
- Make a list of and review all of your marketing plans for acquisition and retention and identify opportunities for improvement.
Previous: Episode C3.008 Identify New Users for Existing Offer
Next: Episode C3.010 Customer Recovery
Written by Simone Douglas
The Publican & Licensee of the Duke of Brunswick Hotel, Executive Director for BNI Adelaide North one of the biggest networking organisations in the world, the driving force behind South Australia’s leading social media agency, Social Media AOK and now best-selling author with her first book “Seriously Social – turning your online game into real-world gain”.
You can connect with Simone on any of her seriously social platforms
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Simone Douglas 2:36
We’re back you’re listening to the IBGR network. IBGR is a call sign as a radio station, but we are so much more than that. You are lucky enough to hear from entrepreneurs all over the world and have ready made access to those at our community network. So please go to IBGR.network and join us community, it’s a great place to get your questions answered and keep your businesses moving to the next level. This is Episode Seven in our C lane at IBGR network sales and marketing, go to our website IBGR.network and download the show notes. And that will give you the cliff notes version of what we have covered to date. To make the most of it, if you’re listening live, you get the opportunity to listen live four times per day. Toronto, Canada from two to three Sydney, Australia from 10 to 11. Mumbai, India 1130 to 12:30am, and in London, hopefully you’re catching me over lunch because it’s between one and two. So moving right along, we’re getting on to the house … So we talked a little bit about finding those promising accounts and customers, we’ve talked about the Net Promoter scores and how you use those to identify what things are happening.
So you’re happy, satisfied customers, this is your loyal base, the real foundation of your company. And once we have identified them, you need to also focus on a few primary factors. So one of the things to be aware of is span of customer lifetime. So the longer you’ve had a customer, the more they value your company and its offerings. This means they’re probably willing to purchase more from you based on trust in additional value. So a great example of this is because I have oodles of spare time I also happen to own a pub, where they’re actually the only gluten free Hotel in South Australia, and so our customers span in terms of lifetime now we’ve only been gluten free for about coming up to two years, but our customers who are celiacs are ridiculously loyal and every time we add on a new product or service, it’s as simple as throwing a post stuff on Facebook and we will be inundated with bookings, you know. So when we started doing fresh made waffles, those kinds of things, because we’ve got that trust there, they know that it’s a safe environment, they know what they’re going to get into the service that they’re going to get and so they leap in very quickly, or they’re known as early adopters, I suppose. But if we look at it from a business to business perspective, the other thing you can look at is average price paid. So the better the process or the larger the monthly retainers that your customers pay, the more trust they have in your value propositions. So if a customer might sign on the dotted line without discounts and rebates, they’re probably not a loyal customer. Okay. They’re motivated solely by price. Customers motivated solely by price and not customers, okay? Whilst we’re happy to take their money to a point absolutely provided it’s still profitable for us, they tend to be high maintenance customers that take up more time, and attention and that in turn, also contributes to reducing the profitability of that client or that account. So just be aware of those things, once they’re happy to pay a good price for a good service or a good product, you know, if we look at Apple, for example, you know, they never discount their products. And I’m sure the show after mine will be talking a fair bit about that. So, yeah, we don’t want them motivated solely by price. The other thing we need to consider is volatility resistance. So, if your company went through a couple of bumps with your products and services, pay close attention to the customers who stood by you, and patiently waited for things to calm down, they think your offering was worth the wait, which means they have a higher chance of purchasing another product or service at its peak. Loyal customer accounts are the best place for you to push for your share of wallet growth campaign to start, okay, they clearly value company’s offerings and are more willing to try the other high quality product and services that you provide. So compile this list. Okay, once you’ve written out this list, then you can move on to the other side of the customer equation. Volatility resistance is particularly pertinent right now. If you think about how many businesses worldwide, trying to survive COVID-19 restrictions, so whether you’ve been shut down whether you’ve had to reboot the way that you do business, that volatility resistance, you know, becomes an issue. So maybe your supply chain got disrupted, but your customers were prepared to wait longer for things to get delivered. You know, maybe it’s that you had to completely pivot and change the product or service that you were offering to your customers, simply to keep money coming through the door. So again, pay really close attention to the customers that actively reached out to the customers that were really paying attention to what was going on for you as a business. They are your brand advocates and they are the ones that you should be going to in the first place when you are looking at increasing things or changing things.
If we move on to the struggling accounts or the other side of the customer equation, these customers are the biggest threat to your company. So it can cost 25 times more to replace them to them to retain them. It’s a lot less expensive to just figure out why they’re leaving and find a way to hold on to them. Okay. So that’s why these accounts are perfect targets for increasing your share of wallet. You just have to figure out why are they considering leaving in the first place. Once you fix that issue, they’re actually ripe for account growth because then they fall back into somebody that you’ve got the longevity with and you have actually turned the relationship around. So to identify churning customers, there are a couple of things that you need to review sales transactions for probably three major red flags that you need to be aware of. Decline in spending by account, so you need to actually keep an eye on when customers start paring back their purchasing, maybe your purchase orders that are coming through to your a lot less. Maybe they have downgraded their pricing package. They’re on a retainer with you. You know, if we look at it from a business to consumer model, maybe you’ve noticed that your Monday night’s trade is starting to downturn all of a sudden that would suggest that we’ve got something wrong in the mix. Decline in purchases of a specific product across all accounts is an interesting one. That means that you’ve got an issue with the product or the services ceased being relevant.
A great example of that is eight years ago, when I started Social Media AOK, you know, the business started off our job was just to set up Facebook pages for people that’s how long ago that was, you know, and we did a roaring trade in that, but eventually that ceased to be a thing and it was all about the advertising was all about content strategy and those kinds of things, you know, market segmentation. So that decline meant that the product ceased to be relevant, but then we had to have a look at our portfolio stuff and change what it was that we were offering to maintain relevance in the marketplace and relevance with our customers. Okay. So once you’ve got that list of at risk accounts, it’s time to figure out how to convince them to stay. Or if you’ve completely lost the customer, how do you maintain contact and potentially win them back? Okay, your customer retention efforts should remain a long term strategy and a component of your share of wallet efforts. Therefore, it takes some time now, to educate all customer facing teams and how to keep customers happy and engaged. We’ll look at cross selling and upselling at the transaction. In level one, okay, so now we’ve got this list of customers to target we want to expand their accounts, so we need to decide which additional products to pitch to each customer, which can be pretty daunting for salespeople often, particularly if you have a huge selection of products.
The fastest and easiest approach, cross selling takes place at the point of purchase or your monthly account, catch ups, whatever that looks like. And because they’re already in the purchase mode, it helps to have some simple sales analytics to uncover commonly purchased combinations of products. So making sure you segmenting those sales to identify those will be really important. Your greatest challenge is to deliver recommendations at that point of sale to your customer. And so educating your team and training them will be really important. Then we look at expanding at the portfolio level. So your goal is proving that values now it’s time to think bigger. Okay, the transaction level approach cross selling focuses on the short term goal of getting more revenue from new customers sooner rather than later. The portfolio approach focuses on that opposite strategy stresses the importance of growing your business with customers over time. Your goal is to prove your value and become the preferred provider for products or product groups where you have minimal traction now, so you need to start by identifying those. Take a look at those low volume sales across the product lines and then define purchasing profiles across customer segments and uncover customers who fit the profile for specific products but aren’t purchasing them. You also need to find significant gaps between expected and actual purchases based on these customer profiles. Okay, for example, clothing store might determine that men between the ages of 35 and 45 athletic apparel typically accounts for 10% of total spend. If an individual customer fitting the profile he spends 1% of his total on athletic apparel, the model flags opportunity to approach him and capture the remaining 9%. Okay. There are three areas that are a good starting points for this. And you goal should be to find the five biggest opportunities for each customer and work on capturing them. I keep your ambitions reasonable, then we get to pricing. Okay, so pricing is an interesting one at the end of the day price plays a major role. If customers find your prices too high, they won’t want to increase their spend. If they’re too low, they’ll assume you’re tapped on product offerings have a little worth. Key to increasing the share of wallet by customers is to make the transactional pricing so tempting they can’t pass up the deal. So looking at offering an older product version at discounted price selling a second product at a bare bottom price for a limited amount of time. Adding an inexpensive byproduct to the transactional building products so that each is cheaper within the offering then itself is good way to look at that. Okay, so bearing all those things in mind you should be compiling a list as you work through things now, to make the most of this process. We’re very shortly going to take a short two minute break and when we return, we’ll be bringing it all together and look at why any of the things that we have covered so far matter and the direct impact that it can have to your bottom line. You’ve been listening to Episode Seven in our C line at IGBR network sales and marketing. I am Simone Douglas and we’ll get back to business after a short break.