While researching this article I ran some sales reports for our sister company that revealed some startling facts. They point out how devastating it is to underestimate the power of marketing to existing clients. And how our own expectations can sabotage our best efforts. The good news is that the fix is easy. Allow me to explain.
If you’ve ever been involved in a brand new small business you know full well the intense drive to get clients. No new clients, no new business, no food on the table. It’s simple.
But as we attain a level of success with getting new clients, we can fall into a common trap. That is, we focus solely on getting new clients. We then neglect two vital marketing efforts:1 - Selling more, (increasing the average transaction) and
2 - Selling more often to the clients we already have.
When you combine all three efforts, you get what marketing consultant Jay Abraham calls the power of geometric growth. When you get lazy and use just one or two of these methods, you limit your business growth. (You can demonstrate this for youself using our Sales Growth calculator here.) A quick story shows just what I mean.
In our early days at fledgling Technifold USA, we worked hard on getting new clients. We also had an expectation that the majority of sales would be ‘average’ (maybe one device) and that a minority would qualify as ‘good’ with X sales (multiple devices.) There was no really good reason for such an expectation. It was probably a mindset based on my experience working in printing companies. And we also knew that some sort of a goal would be helpful.
My subconscious was saying “Hey, once you get to X dollars with a customer, you don’t have to work so hard on that customer…they’ve reached their limit so move on the next new one.” Fortunately, my relentless study of marketing saved me, almost accidentally, from my “reasonable” inner voice.
Using the magic lens of hindsight and real reports, I see how wrong I was.
- 23% of our clients buy more than my imaginary limit X.
- 8% of our clients buy at least 2 times more than my limit.
- Of that 8%, the average purchase was nearly 4 times more than my expected limit, contributing nearly 3 full years worth of gross sales.
- The top 1% of our clients purchases an average of nearly 10 times my expected limit, contributing nearly a full year of gross sales!
- The top 1% purchases 52 times more than our average sale amount.
You see of course that it’s a huge mistake to focus solely on getting new clients. In our case it would have cost several years worth of sales volume and we certainly would not have made the Inc. 5000 list of fastest growing companies.
So what’s the secret to growing sales beyond your expectations? I already confessed that in our formative years our focus was on getting new clients. While we didn’t expect more than a certain level of sales, we knew we had to work hard to get to that original imaginary “limit.”
I decided to stay in touch with clients in as many ways as possible. This would, I hoped, get us some repeat sales to get to our imaginary limit. I used the following methods:
- Phone Calls
- Print Newsletter
- Email Newsletter
- Thank you notes
- Direct Mail
- Personal Visits
Fortunately I kept at it, utilizing some or all of these marketing methods for years. The net effect was that we created a marketing system for staying in regular touch with our clients, primarily through newsletters.
Yet looking back it seems almost miraculous that I didn’t sabotage myself. Some say the biggest obstacles to real business growth are our own self-limiting beliefs. The story above shows two good examples of that.
First, it would have been easy to use our ‘average sale’ those first couple of years as a guidepost for sales activity. If we sold enough to reach our financial comfort level that week, (or month, or quarter) we could relax. You routinely see this in sales people. It doesn’t matter whether 50K, 100K or 1 million dollars is the secret magic sales number; when they hit it they start to cruise.
Secondly, my expectation of what clients are willing to spend could have put a real damper on our growth. If you asked me in Year One if I thought dozens of clients would eventually spend 52 times our average sale, I would have laughed. If you told me hundreds of clients would invest ten times more than my imaginary limit, I would have objected…with plenty of imaginary reasons.
The lessons learned are these.
First, focus as much (or more) of your marketing energy on your current clients as on getting new ones.
Second, don’t let pre-conceived notions, expectations, customs or beliefs hold you back from putting in the effort.
When you focus on the right efforts, the right results will follow.
The geometric growth formula is easy:
- Get new clients
- Increase the average sale
- Sell to clients more frequently
Stay top of mind with your clients and the business growth will follow.