Published by The Guardian
Making the most of established customers often produces better results and enables more small business growth than pitching to new prospects.
It’s easy to get carried away with acquiring new clients. After all, the more customers you have, the better, right?
Not necessarily, says Graham L Morgan, small business consultant with Business Doctors. “It is quite common for many business models to have 20% of customers delivering 80% of your turnover,” he says. “It surprises me when I ask a business owner to name their top 20 customers how few actually can. Conversely, many can name the last account they won.” But nurturing the relationships you already have could be the best way to grow business. “SMEs that take time to really understand their customers and the way those customers’ businesses operate find that they can increase the volumes of goods and services they can deliver to them,” says Morgan.
He suggests researching factors including your customer’s total spend and your percentage of this, whether your products and services fit their supply chain and whether there’s scope for collaborative or partnership working. Building strong, personal relationships with clients is one of the joys of running a small business. It’s the reason many people leave a big company to start their own operation.
Investigate and adapt accordingly
…Analytics could also point the way. Timing can be crucial, says Doron Cohen, chief executive of cross-border business payments service Covercy. “All our customers have different needs as we handle a lot of transactions. For example, some make payments daily while others make them monthly.
“As we’re online only, we rely heavily on our analytics to spot potential upsell opportunities with current clients based on their behaviours when using Covercy,” he says. “Doing this has enabled us to actually forecast when our next chance to upsell arises.”