optimizing revenue from your existing customer base
Investing in generating incremental revenue from existing customers is four times more profitable than investing in acquisition.
Optimizing your customer base is a low-hanging revenue opportunity for savvy marketers because it maximizes the return on your existing resources, and forces you to analyze and profile your most valuable customer (MVC) matrixes.
Three key considerations in optimizing existing customers include:
Increasing the Frequency and Regularity of Purchases
In an established business, 10 to 15% of your client/customer base will be die-hard loyalists and give 100% of their business to you. The other 85 to 90% will spread their business between three or more suppliers. But because they already have a relationship with you, reaching them with an effective selling proposition is your best opportunity to increase frequency. The key to securing one or two more visits or purchases with them is understanding their perceived needs.
Increasing the Average Size of Sale
In retail it is called ticket average, when supplying services it’s called monthly recurring charges (MRC), and it’s calculated by dividing your transactions by revenue, giving you the average amount your customers/clients spend. There are many ways to build this figure including building the size of group you sell to, selling higher priced items, or bundling more items in the sale.
Selling Other Stuff
In today’s cyber-world, having a previous relationship with a paying customer that trusts you is a valuable commodity. Do not miss out on the opportunity to develop partnerships with complementary products and services that can provide value-added services to your customers, while you make revenue from providing access to your transaction. For example, one of our clients provides discounted travel for a given flight, day and time. After completing the transaction, their customers also have the option of buying insurance to cover the additional charge if they need to change their travel plans.
For more information contact Harris
