New customers are the lifeblood of any business.
Well, it’s the lifeblood of growth.
There are only so many ways you can increase revenue from the same customers. The best way to long-term growth is consistent growth through acquiring new customers.
And not losing the ones you have…
But let’s step back from the focus on new customers for a second. You don’t want to overlook the ways to increase revenue from existing customers.
By taking this focus, even if just in the short term, you can improve your business in many ways.
Ways that could lead to more appeal to new customers in the future.
1. Add or Alter Incentive
The focus is on frequency here. How often or how many times your customers buy from you.
You can start to figure this out one way by looking at your pricing structure.
What is the incentive for customers to buy more from you right now?
Let’s say you build decks for homes. You make the most money by the size of the deck. Not the number of decks created. Simply square footage is what you want to focus on.
The monetary incentive then should be for each customer to want as big of a deck as possible.
You can price your decks by square footage. And that price can decrease as square footage increases. You create incentive for each customer to want a larger deck.
They pay $30/square foot, for example, for the first 100 square feet. Let’s say 10′ x 10′. But the next 100 square feet are only $20/square foot.
They get the first 10′ x 10′ deck for $3,000. But they could double it for an additional $2,000. A 10′ x 10′ deck for $3,000 or a 20′ x 20′ deck for $5,000.
That gets customers thinking.
And the good thing for you is that you already have your equipment and people on site. So your costs are down and it’s fine for the price to be lower.
2. Cut The Price
By improving your internal systems and efficiencies.
I read a book about James Hill who was instrumental in the rise of the Great Northern Railway. One of his tenets for successful business was to cut the price of his product. He was always looking for ways to cut the price that he charged his customers.
He liked having freight on his railways. Anyone shipping freight, all kinds of goods from grain to timber, was his customer.
And he wanted to cut the price. He knew this would allow more companies to ship via rail, but also his existing customers to ship more. The lower the cost of freight the more they could invest in growing their own businesses.
Hill did this by always looking for efficiencies with his railway. He invested in better rails. He invested in smoothing grades. Anything that would lead to a more efficient business just so he could cut the price.
3. Change The Paradigm
By offering new products.
Apple did this with the iPhone.
In the Steve Jobs biography it was revealed that there was quite a debate within Apple about the iPhone and how its launch would make the iPod obsolete.
Jobs understood, though, that if Apple didn’t launch the iPhone that someone else would and the iPod would be obsolete anyway.
When the iPhone launched, iPod customers bought it. And obviously other new customers bought it.
But a way to get new business from existing customers is to offer them something new. And you can do it in a big way by changing the paradigm.
4. New Reason To Buy
Let’s say you’re running a dental office.
The main reason, it seems, that people go to the dentist is to have nice teeth. Good looking and healthy teeth.
That reason will get people to come in.
But what if there was an additional reason or even additional reasons for people to come in. And to come in even more often?
Colgate knows what’s up. They’re looking at research and how proper oral health can help people avoid heart disease, stroke and even memory loss.
These are additional reasons for current customers to buy more and to buy more often.
Perhaps a dental office could offer quarterly tune-ups. Just cleaning only appointments. No x-rays or meetings with the dentist. Do that twice a year, but also come in two more times for just cleanings.
A way to help with more than just nice looking teeth. Do it and you’ll help yourself avoid other common chronic diseases.
5. Automate Rebuying
Do you really get your car’s oil changed exactly at 4,000 or 5,000 miles?
You probably go over a bit. Like most people. No big deal.
But for the oil change place or the dealership that’s a loss of potential business.
If a person drives 12,000 miles a year they’re due for about 3 oil changes. But if they put it off they might only get 5 oil changes in two years instead of 6.
The oil change place could automate this.
Automatic reminders. Emails. Texts. Calls. Even an offer to pickup the car at the person’s house for them. They don’t even have to come in.
Automating a schedule can work for many businesses. It’s a way to increase business from existing customers.
You want to be looking for ways to get more customers. New customers are going to lead to long-term growth.
But don’t overlook getting more business from existing customers. Not only can you increase your revenue (and regular revenue) you can find ways to improve your business.
And that can lead to even more new business.