A great source of new sales growth is with your existing loyal customers. After all, they already understand the category, they trust your brand, and you have an existing relationship - meaning you’ve been given permission to interact with them. When I say loyal customer, I mean one that buys 100% of the product or service from you and no one else like your main competitors.
You have three ways to get growth from your loyal customers: increase quantity purchased, increase purchase frequency, or increase the price, assuming you have a valid reason to raise it. Let’s look at each one.
Increasing the quantity purchased means getting customers to buy more volume of product during each visit to the store, whether online or in person. There are a variety of ways to do this. One way is through product packaging. Costco, the membership warehouse club, sells everything in bulk quantities. When you buy paper towels, you don’t get one, or two, or even three. You have to buy one big package with twelve rolls of paper towels.
Another way to increase volume for each shopping visit is to cross promote your products. When the customer buys something, offer them something else that goes along with that product. Amazon does this the best. When you add an item to your shopping cart, Amazon displays this: Customers Who Bought This Item Also Bought, etc, etc. And they show you a variety of products to consider. Very smart.
Another source of new growth is to get customers to shop more frequently. The more times they visit you, the more they’re likely they are to buy something. A simple way to do that is to offer special promotions and discounts for repeat visits. I buy a lot of my clothes online from a company in London. It never fails. Right after I make a purchase, they email a really juicy offer to get me back in there. Works every time!
And the third source of growth with existing, loyal customers is price. Raising price just a small amount has a huge impact on profitability. But you have to give your customers a good reason for the price increase, and that means offering them a new source of value. It could be from a new, innovative product feature or some new service that you offer as part of the overall relationship. LinkedIn for example offers their subscribers a base level of service for free, but then gives you the opportunity to upgrade to various premium levels giving you access to more features. Smart.
So take a close look at your 100% loyal customers and find ways of using all three approaches to sales growth. Hey, they already appreciate doing business with you. Given them a chance to be even better customers and you’ll love the outcome.
Here's everything you wanted to know about how to foster a culture of innovation in your organization -- a 56-minute VOICE AMERICA radio interview with Mitch Ditkoff, Co-Founder and President of Idea Champions and the writer of this blog. OK. maybe it's not everything you wanted to know, but at least it's trending in that direction. (Please forgive me for using the word "trending". I don't like that word. It just kind of slipped out).
The main thing? Click the link above and listen to the interview. Good food for thought -- something you might want to forward to you manager or other senior leaders in your company -- especially if they are claiming some interest in the "innovation thing."
Tune into a 60-minute "Out of Your Comfort Zone" VOICE AMERICA interview with Mitch Ditkoff. TOPIC? How to foster a culture of innovation and why storytelling is a great way to help accomplish that noble goal. Friday, 11:00 am PST. Hosted by the highly insightful Wanda Wallace, Founder of Leadership Forum Inc.