Are you having trouble closing new deals and increasing revenue? 💲 Despite a recent rebound in B2B sales, they’re still down 31% from last year, according to a recent Paddle report: There is a reduction in budget, spending discretionary funds is limited.
So, it is evident that it has become more difficult than ever to navigate B2B buying processes. In spite of all the chaos, it is still possible to increase revenue this year.
👉 But in what way? You can do this by focusing more on your existing customers. However, getting the most out of your customer base is one of your best opportunities to grow your business. This is because when relationships last longer, revenue increases.
In this article, we have explained why existing customers matter more than ever and how selling to them could increase revenue. Also, we have discussed several reasons why staying focused on existing customers is more important than expanding new business. 🎉
🔐 KEY HIGHLIGHTS
- Understanding the value of existing customers is crucial for any business aiming for sustainable growth and long-term success.
- The reasons why existing customers matter more than ever are due to increased profitability, improved customer loyalty, easier and cheaper services, retaining existing customers for longer, easier communication and data collection, stability during economic uncertainty, and powerful word-of-mouth marketing.
- CRM platforms help you sell existing customers through personalized offers and marketing, improved customer service and relationships, customer segmentation and targeting, streamlined sales processes, and increased employee productivity and consistency.
Understanding the Value of Existing Customers
Understanding the value of existing customers is crucial for any business aiming for sustainable growth and long-term success. It is not just about monetary transactions that determine customer value; it goes beyond that. It is the perceived worth of your product or service to the customer.
Moreover, businesses should consider some factors that contribute to customer value by asking this question, such as
- Does your offering solve a specific problem or fulfill a need for the customer?
- Do customers feel they’re getting their money’s worth?
Since every interaction with your customer brand shares their perception of value, it is important to prioritize a positive and consistent customer experience across all touchpoints.
Why are Existing Customers Important?
Existing customers have a significant added value for any business. Remember that regular customers already know and love your products, offers, and assortment. So you don’t have to persuade them again to keep ordering. Moreover, by integrating a customer care system, you can create the most favorable conditions for customer retention. As a result, you will be able to ensure a regular source of revenue while requiring limited resources.
As the market for customers becomes increasingly competitive, stable old customers will become a more important competitive advantage in the future.
7 Reasons Why Existing Customers Matter More Than Ever
Keeping existing customers engaged in an increasingly competitive marketplace requires more than maintaining relationships; it requires building trust and loyalty to drive sustainable growth. These are 7 reasons why existing customers are more important than ever before:
1. Increased Profitability
Adding new customers to your existing customer base is one of the best ways to increase sales. It’s not just a great way to increase revenue – it’s also a great way to increase profitability.
Aside from this, expansion revenue has 5 unique characteristics that new business revenue does not possess.
- Increased LTV – every new customer account increases the lifetime value of the previous one.
- Reduced service costs – your existing customers require less help with the set-up.
- Eliminates churn – your customers are more invested in your product.
- No CAC – the customer acquisition cost is almost zero.
- Reduced sales effort – it reduces the time and attention required for a new deal.
Because of this dramatic reduction in costs, expansion revenue can be one of your company’s most profitable and valuable revenue streams.
2. Improved Customer Loyalty
The loyalty of customers is one of the most important factors that determine the success of a business. Their contribution is not only a steady source of revenue but also a stabilizing force for the customer base. As a result, companies try to provide exceptional customer service, personalized experiences, and ongoing engagement. The reason for this is that satisfied customers are more likely to recommend your company to others, with loyal customers willing to do so, thereby gaining a strong customer base.
Despite lower prices, loyal customers are less likely to switch to competitors because they value their relationship and trust in the brand. The retention rate of existing customers is higher than the retention rate of new customers referred by existing customers.
3. Powerful Word-of-Mouth Marketing
Existing customers who are satisfied with your products and services are more likely to recommend them to friends and family, resulting in effective word-of-mouth marketing. This type of marketing is extremely valuable since it comes from a trusted source and can have a substantial impact on purchasing decisions. Word-of-mouth advertising can help attract new customers without requiring high advertising costs.
4. Easier and Cheaper to Services
As soon as you bring on a new customer, the focus is always on customer acquisition cost (CAC) – what was spent on sales and marketing to close the deal. Comparatively, less attention is paid to the costs associated with onboarding and acquiring new customers.
It can cost businesses more than a thousand dollars to onboard new customers, especially if your product or service is complicated. Even though paid onboarding programs mitigate these costs, they still require resources and mental overhead, which distracts you from other tasks.
Conversely, if you’re selling to existing customers, they already know the product well. By doing this, you can drastically reduce both the financial and opportunity costs of onboarding new customers and help them get value from their upsell faster.
5. Easier Communication and Data Collection
It is possible to use existing customer data to enhance business strategies by collecting and analyzing their data. Businesses already have insights into their preferences, purchase history, and behavior patterns.
With this information, marketing campaigns can be tailored to better match customer needs, products can be tailored to fit customer preferences, and customer service can be improved. Due to their familiarity with the brand, communicating with existing customers is easier and more natural.
6. Retain Existing Customers for Long Run
There is no guarantee that a new customer will remain a customer for the long run when you sign them up for your product.
To minimize churn, you must do everything you can to acquire new customers. Acquiring new customers costs five times more than retaining existing ones, so it is important to do everything in your power to retain them. One of the best ways to retain customers is to offer them an upsell or cross-sell that adds real value to their lives.
7. Stability During Economic Uncertainty
In the current economic, most companies are closely monitoring their finances and reducing their expenditures. For many B2B companies, this economic instability creates challenging market conditions, such as reductions in staff, reduced budgets, and lower discretionary spending.
In turn, these factors contribute to a lack of new business, which stunts many businesses’ growth. Despite this, many businesses are eager to “do more with less” by exploring ways their existing solutions can offer greater ROI than the procurement of new ones. Investing in increasing sales to existing customers helps protect existing revenue, solve current customer problems, and provide a path to scalable growth.
How does a CRM platform help you sell existing customers?
A CRM platform enables businesses to sell to existing customers because it consolidates crucial information about the customers. Thus, businesses can use the customers’ preferences, past purchase behavior, and interactions for targeted offers and recommendations, which in turn helps to enhance long-term relationships and the probability of making a sale at a given moment.
1. Customer Segmentation and Targeting
Whether it’s purchase history, demographics, or engagement levels, a CRM platform allows businesses to segment their customer base based on various criteria. This segmentation helps in targeting specific groups with tailored marketing campaigns.
For example, you can create segments for high-value customers, recent purchasers, or inactive customers. By understanding the unique needs and behaviors of each segment, you can develop more effective strategies to re-engage and sell to existing customers.
2. Personalised Offers and Marketing
With data stored in a CRM system, it is possible to come up with very specific offers and messages to potential buyers. This is because each individual customer is targeted, and the communication that is sent to them is related to their interests or past behavior.
For example, you can use product recommendations, birthday offers, or other promotions that are relevant to previous purchases. Such a level of customization and personalization goes a long way in improving the customer experience, and therefore, there is a higher probability of converting the existing customers into repetitive customers.
3. Improved Customer Service and Relationships
CRM platform gives a 360-degree view of how customers have been interacting with the company and what they have been buying previously. So, this information helps customer service representatives to be more responsive and effective, solving problems faster and more efficiently, enhancing the level of customer satisfaction.
It is also important to note that in the current market, it is easier to sell more to existing customers by developing good relationships with them and providing good customer service.
4. Streamlined Sales Processes
CRM software helps to eliminate time-consuming tasks and allows the sales department to have the tools necessary to increase productivity. Tools such as lead scoring and follow-up reminders as well as automatic e-mail follow-ups, assist the sales representatives to prioritize their tasks and opportunities. This efficiency also guarantees that existing customers are managed well, hence the high chances of repeat business.
5. Increased Employee Productivity and Consistency
With the consolidation of customer data and the handling of time-consuming activities, the CRM platform increases the efficiency of the employees. In particular, by having a single source of up-to-date customer data, the sales and support teams can maintain a more uniform approach to communication and services.
This consistency is extremely important in order to ensure trust and credibility with the existing customers. Furthermore, since the time for tactical actions is more prominent, the employees can invest their efforts in such areas as the improvement of customer relations and the search for new sales leads.
Conclusion
Therefore, it is as crucial as ever to pay special attention to customer maintenance in the current market environment. While they are a source of regular income, these regular customers are not only a marketing force for your brand but a source of word-of-mouth referrals and trust. This way, the businesses can reap the benefits of lower customer acquisition costs, higher lifetime value, and better customer insights.
Hence, in a world that has become increasingly focused on authenticity and reliability, the best way to assure future growth and guaranteed success is to invest in your current customers.
