Saturday, October 21, 2006

"The Best Way to Grow Sales"

Most people think the best way to grow sales is to build loyalty from your current customer base. This could help to secure long term cashflows, as well as help to increase the average purchase price per customer over the long term, as they build trust with your company.

Although it is very important to build loyalty with your client base, many companies spend too much on marketing to their current clients, and forget that true growth comes from the number of new clients you have - not from the average purchase price of your current clients.

Once clients become accustomed to your pricing structure, it can be difficult to raise prices. The only way you can raise your price point is to find new customers.

Furthermore, most clients have a need for roughly the same amount of products or services as they did in prior years.

For example: One man who might purchase business cards from a company for his small independent organization might need these new cards every six months.

The company might be able to get him to increase his sales by getting him to order post cards for a direct mail campaign as well. That would bring in a few hundred dollars more over the course of the year, and maybe a couple thousand if he had a big enough organization.

However, if the company were to find a completely new client who had 100 people in their office that needed business cards every six months, sales would be increased by several thousand that year.

The effort expended trying to increase that which your clients are already spending with your company is better spent looking for your next client.

I recently was working at a Fiserv convention and staging (helping with the Audio/Video) and their guest speaker, Doug Hall, founder of Eureka! Ranch - an ideas, marketing and consulting firm - had these statistics:

Out of 9,804 brands, the number of customers each brand had was 2.8 times more important than amount bought per customer.

The best way to grow your sales revenue is to find new customers.

With this in mind, do you spend your marketing dollars where it counts? Make sure you are reaching out to as many new people as you can. Build a giant database of happy clients, continuously add new clients to it, and the volume of their sales will help carry you and your business to the next level.


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