Existing Customers versus New Customers

by Rebecca
(China)

To sell more effectively, what is the optimal percentage of spending our energy and time on maintaining existing customers and exploring new customers?

Answer
Hi Rebecca,

I remember finding out many years ago that it's 6 - 7 times harder to get a new customer than to keep the one you have.

Plainly, if you are in a business where you can get repeat business it makes sense to look after the customers you have.

From my own experience in importing I can recall that my biggest customer when I started with my last employer purchased one product and was spending $80,000 /year with us. Eleven years later they were buying 16 products and spending $2.2 million / year. It certainly paid me to look after them.

Also, note that I went from selling one product to selling sixteen to them. So, I gained quite a lot of NEW business from an existing customer. (This may not be possible in your business?)

I don't know how I divided up my time in terms of percentage spent on each but what I did was to make sure my current clients were looked after FIRST. I also spent a bit of time following up on things (like monitoring stock levels) to make sure there were no fires to put out because I knew fire-fighting took up an inordinate amount of time for little sales return.

Hope these comments help,
Regards Greg

Existing Customers versus New Customers

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