Every year I spend an hour on the phone with the same giant corporation, which shall remain nameless, because every year they jack up my rate and add new services that I have never approved. And every year, I call and threaten to cancel my services. And every year they eventually remove the unwanted add-ons and lower my rate. Did I say, this happens every year?
The kicker is they lower my rate, to the same rate, they offer new customers! Not existing customers they already have, but just for new customers. Classy!
Most of the businesses that I consult with have recurring customers. Several of these businesses also focus on getting new customers, instead of focusing more on their existing customers. I always advise them to focus on the existing customer first. Why?
Check out this simple example:
Lane’s CPA Solutions
Lane is a CPA that wants desperately to grow his business. The problem is he just doesn’t know who he should target or what he should do.
• Lane has 50 tax only clients (small businesses) at $500 each = $25,000/year
• Lane also has 10 of these clients, that use his other services (payroll, sales tax, bookkeeping) all year long at $500/month = $60,000/year.
• Lane makes $85,000/year.
Not Bad
• Since Lane wants to increase his revenue, he may be tempted to look for new tax clients.
• 5 new tax clients = $5,000 increase in revenue/year or now $90,000 revenue/year.
Good
• However, he may instead find it easier and more lucrative to convert a few of these tax only clients into monthly clients and not focus on new clients yet.
• 5 converted monthly clients at $500/month = $30,000 increase or now $115,000/year.
Better
• Also, what if Lane got each of his 10 existing monthly clients to spend just 20% more or $600/month by adding another service? That would be an increase of $12,000/year with minimal effort to $127,000 revenue/year.
Best
Okay, I said it was simple. I didn’t say it was easy. But you get the point.
• Do you have any semi-regular customers that could be converted into regular customers?
• Do you have any other fantastic products or services that your regular customers could use?
If so, you may be on your way to increasing your sales, without new customers.
If you want to meet one-on-one with the TSBDC and increase your sales,
contact us today.
