In these demanding times we’re all looking to grow our businesses in the most cost effective way and that’s why a strategy for growth through existing clients should be a major part of a business plan. It makes complete sense, because with any current relationships a significant amount of information about their business and buying patterns, as well as a picture of their credit status and history is already available. To get the most out of this opportunity it may be necessary to re-evaluate your product offering or structure, but this could be an opportunity to diversify into other markets to sell complimentary added value products or services.
All too often the emphasis is on new business which risks losing valuable and loyal customers, as competitors will be targeting your clients with their new business teams. This is not to say that new business should not be part of the plan but its worth considering that the cost of acquiring new business is high, typically running out at many times what it costs to gain additional business from existing clients. If operating in a mature vertical market, then aggressively pursuing a new business strategy can result in a price war. With little or no start-ups entering the market then the only recourse is to take business away from the competition, and they’re not going to give them up without a fight.
A sensible solution is to have both as part of your plan and have them serviced by two different types of salesperson; these are commonly referred to as Hunters and Gatherers (or alternatively Hunters and Farmers). They have very different types of personalities, the hunter chases every sale to closure then moves onto the next one and they prefer a short sales cycle. The gatherer however takes a longer-term view and nurtures sales through relationship building over a period of time. Utilising both competencies to the full will bring great benefits, as new clients will be developed through delivery of added value products and services. If implemented correctly a reputation for excellent service will quickly follow and in turn will generate new business, which if continued will ensure loyalty. This strategy is very difficult to break down and although it can be costly to initially implement from an overhead perspective, customers will ultimately accept a higher price for service excellence and so in time it will pay for itself.
So to sum up, a careful approach to servicing and developing existing clients will help to grow your business, your reputation and ultimately your market share, conversely too much emphasis on new business can effect your reputation and market share in an altogether different direction.
