5 Actions to Generate More Sales from Existing Customers
Sales and Marketing Management
JUNE 24, 2019
Author: By Brad Soper, Lisa Jaeger and Alexander Stahmer While there are no shortcuts to creating and implementing an effective, long-term sales strategy, there are five actions sales teams can take to get that strategy on track – and keep it there – by generating more sales from existing customers. . Segment customers by their potential. Correct segmentation is the most effective way to prioritize customers and manage them in a targeted way. If each sales representative is assigned 50 customers or less, it makes sense to have the reps estimate customer potential individually. However, if each sales representative is responsible for hundreds of customers, it becomes necessary for companies to use analytical methods. One method involves clustering similar customers (e.g. in terms of size, region, industry) and focusing on those with a high Customer Lifetime Value (CLV) within each cluster. Customers that fall below the revenue level of these high CLV customers have the greatest growth potential. Outliers at the higher end shouldn’t be taken into account to avoid setting potential levels that are unattainable. Establish frequency of customer contact. When it’s clear how valuable a customer (potentially) is, the next step is to define how often they should be contacted. Although the frequency of contact varies by industry, every company needs to have a set of clearly defined rules in place, e.g. “personal contact (telephone call, visit) with A customers every 30 days and B-/C-customers every 90 days; D customers receive an email or letter every 180 days.”. This is an effective method to prevent churn. Also, it helps companies to better calculate the number of salespeople they need based on how many visits and calls have to be made every year. Use heat maps. It’s not enough to know how many salespeople are needed; tracking their success is essential. Most sales territories are divided according to a region. A simple heat map, which visually represents the relationship between sales results and potential, offers companies an effective overview of performance. There are many reasons why salespeople may be underperforming against potential. But companies must first be alerted that there is an issue. Plan regularly scheduled sales routines and touch points. Weekly, monthly, quarterly and semiannual sales meetings have to be added to the calendar. For example, the department calendar could look something like this: On Monday mornings, the team leader sets aside time to align with their sales teams (phone or field). The telephone sales team meets for stand-up meetings on a daily basis to discuss the schedule. Thursday evenings are reserved for internal sales to discuss the week’s outcomes, and on Friday mornings, field sales does the same. This gives the different hierarchical levels time to run through all the essential details. By clearly defining the important topics and figures and distributing a standardized report after each meeting, everyone knows what they need to do and when they need to do it. Responsibilities won’t be too diffuse, interventions won’t occur too late, and there won't be any more problems sharing best practices in sales. Ask churned customers for feedback. If, despite sales’ best efforts, a customer terminates their contract, their feedback is essential. While this exercise can be a painful, it's important to ask openly and honestly what the issue was. Don't let price be the excuse. If they mention price, ask them how the service should be improved to justify the price. Any aspects that keep showing up are actionable indicators of how the company can improve the product, service, or sales processes, so next time, price won’t be the issue. This is how to create a solid foundation for attracting new customers and winning back old ones. Based in Simon-Kucher & Partners’ Atlanta office, Brad Soper specializes in sales force transformation and pricing excellence in the B2B sector. His areas of expertise include sales force effectiveness, go-to-market strategies, customer segmentation, pricing strategies and value-based discounting. Lisa Jaeger is a partner in the Frankfurt office, managing Simon-Kucher’s Media practice. She is an expert in portfolio optimization, pricing, and marketing for media companies, focusing on physical offers and revenue streams as well as the digital transformation of business models. Alexander Stahmer is a director in Simon-Kucher’s Cologne office. He is part of the Software, Internet & Media practice, and is an expert in optimizing sales processes and teams, reward systems, product offer structures, and pricing strategies for technology and media companies.