In last week’s post I mentioned that we’d been listening to the big challenges facing small businesses. Getting more sales was a challenge that repeatedly comes up, no surprises there. However, what may not be so obvious is, that one of the most effective solutions to generating more business doesn’t involve advertising. Anthony Fensom, talks to us about how to generate more sales.
Business owners can maximise return on investment (ROI) from new business activities by “super pleasing” existing clients, not marketing to unknown contacts. Why then do so many spend more time spruiking to outsiders, and how do you balance the marketing mix?
For professional service firms, referrals from existing clients or known contacts often constitute the vast majority of new business, particularly given the intangible nature of the service. But the same can apply to industries with a physical product, such as transport. Walter Scremin, general manager of family-owned Ontime Group, says half of his new business is from existing clients.
According to research, a typical unhappy customer tells eight to 10 people about their problem, requiring “twelve positive service incidents to make up for one negative incident”.2
Managing the mix
David H. Maister, author of Managing the Professional Service Firm suggests that the five main steps of a new business comprise of the below:
- Super pleasing existing clients, which is important for word-of-mouth referrals.
- Nurturing or marketing to existing clients.
- Listening to gather market intelligence on opportunities
- Courting or selling and proposing to new clients.
- Broadcasting or generating leads through marketing activities
According to Maister, the highest ROI is from super pleasing an existing client, since it is far easier to get more out of an existing client’s business than obtaining the first order from a new client. Consequentially, the lowest ROI comes from “broadcasting” to those unfamiliar with your business, such as through a direct mail campaign.
“the highest return on investment, is from super pleasing an existing client”
Businesses can ensure their products and services continually improve through an ongoing and systematic effort to track client preferences, including seeking regular client feedback, conducting reverse seminars, attending client industry meetings and conducting market research.
“By inviting evaluations of current services, firms create the opportunity to improve,” Maister says. “As the Japanese manufacturers say, ‘a defect is a treasure’.”
Public relations firm Edelman has reportedly improved client retention threefold through its Net Promoter Score – an ongoing client satisfaction questionnaire.4
Modern-day marketing tools range from blogging to social media, networking and giving presentations . But how can a busy business owner find the time?
The key is finding activities that work for you, according to Julie Fleming, author of The Reluctant Rainmaker.5 Fleming suggests completing one new business task every day, regardless of how small, as well as setting aside regular blocks of time each week as part of a business development plan, with a tracking system and follow-up.
Winning new business may be the lifeblood of any firm, but don’t forget your current clients when chasing the next big sale. This can be as simple as improving your time management so you can be more productive.[Sources]
- Nurture clients from day one, The Courier Mail, 1 July 2013;
- How to Win and Keep Customers, Michael Le Boeuf, 1987;
- Managing the Professional Service Firm, David H. Maister, 1993
- The Reluctant Rainmaker: A Guide for Lawyers Who Hate Selling, Julie A. Fleming, 2009.