Speaking to the head of corporate strategy at a major CRM vendor in Silicon Valley this week it was clear that cross-selling and up-selling to their existing customer base was a key component of their growth strategy.
As an approach, it makes good sense. It is far cheaper and likely that you will do business with an existing customer. Bain Capital has even estimated that for certain industries, a 10% increase in customer retention is roughly equivalent to a 30% increase in a company’s value.
You might be familiar with the challenger customer, Customer Improvement is the ability of a supplier to help critically assess the customer’s business in a way the customer hasn’t fully appreciated on their own, and help them identify new ways to grow, to make money, to save money, to lay out the ROI of taking a step in that direction.
And this is where the importance of your content comes in. Traditionally the above can only happen during meetings and phone calls.
However, if you enable your customer service team with the expertise to execute Customer Improvement to easily create content, they can position the same narrative that they would convey in the meeting, online.
This can then be delivered in real-time through newsletters, social networks like LinkedIn and on a very targeted 1-2-1 or expert-to-expert basis. This will increase the trust, ongoing dialogue and eventually result in the opportunity for sales to close revenue through an up-sell or cross-sell.
This method is called Expert-to-Expert Marketing and is becoming increasingly valuable to leading businesses. On June 28th we will have business leaders from firms like Ketchum, Deloitte and Fujitsu talking at The Rainmaker Event in London on the subject of E2E and more. Information and tickets available here.
As Emmet and Mark Murphy write in their book Leading on the Edge of Chaos, acquiring new customers can cost an organization around five times more than retaining current ones. In fact, a 2% increase in customer retention can have the same effect as decreasing a company’s costs by 10%. To put it another way, reducing customer defection rates by just 5% could increase profitability by 25% to 130%, depending on the industry. - The average business in the U.S. loses around 50% of its customer base every five years. - Companies are four times more likely to do business with an existing customer than a new customer. - The likelihood of selling to an existing customer is 60-70%, whereas it’s just 5-20% for a new customer.