When many security groups are looking to grow their revenue, they often turn to marketing practices such as digital marketing to bring in new leads and encourage sales to find more prospects. This is unquestionably a valuable and necessary way to generate leads.
However, many of the same groups wanting to increase sales fail to reach out to their most powerful growth prospect of all — their existing customers.
How much can this matter? Here are some killer facts: Harvard Business Review reports it’s between five times and 25 times more expensive to acquire a new customer than to retain and satisfy an existing customer. It’s 16 times more expensive to bring a new customer up to the same level as a current loyal customer, according to Small Business Trends. And according to Marketing Metrics, the success rate of selling to an existing customer is 60-70 percent, while the success rate of selling to a new customer is only 5-20 percent!
Your existing customer base holds value and offers huge potential to security companies that master the art of upselling and cross-selling. Upselling is the practice of encouraging customers to purchase a comparable higher-end product than the one in question, while cross-selling invites customers to buy related or complementary items, such as monitoring. Though often used interchangeably, both offer distinct benefits and can be effective in tandem.
Why it’s so valuable:
- Layered services = stickier customers.
- Lowered attrition rates.
- Increased revenue and RMR.
- Upselling and cross-selling is mutually beneficial.
While upselling and cross-selling will boost your business, it also offers advantages to your existing customers. When done well, customers appreciate staying connected and value the fact that you took the time to remember their needs. Another advantage is that it provides a way to address needs the customer may not know they have or may not know could be addressed with the solutions you offer.
To thrive and succeed in today’s competitive environment, dealers, integrators, and manufacturers need to incorporate cross-selling and upselling into their marketing strategy to reap the full benefits of hard-won customers. In fact, data from Forbes reveals 90 percent of the customer value for B2B businesses is actually obtained after the initial sale.
5 Tips to Reach Out to Existing Customers
- DIRECT SALES OUTREACH — One effective method of selling to existing customers is reaching out to them directly. Keep a record of your customers, their current systems, and possible needs. When new products meeting their needs become available, it is easy to reach out and inform them of the new offering and how it is an advantage.
- BILLING STUFFERS — If you use paper billing, do not neglect the opportunity to include a billing stuffer. Use it to remind customers of additional services or promote new products and offers.
- EMAIL AND PRINT NEWSLETTERS — Similar to billing stuffers, connect with your customers using email and print to remind them of services or make them aware of product upgrades. Make your communications informative and enticing.
- SOCIAL MEDIA — Social media ads are for far more than reaching new customers. Stay top of mind and reach existing customers with additional offers by using retargeting ads. Run an offer that makes sense to an existing customer. For example, offering a $99 installation means nothing to someone who already has a system. Instead, choose an upgrade and companion offer, such as “upgrade to include automation, and get a free component.”
- FORMAL REFERRAL PROGRAMS — Your people know people. A formal referral program standardizes the way you invite and reward customers for sharing your brand with others. By offering a formal referral program — with clear and attractive rewards — you encourage your customers to refer customers, create a clear path to do so, and increase the odds of success.
Do not ignore your most valuable potential market when expanding your business. Upselling and cross-selling is an incredible opportunity and neglecting them can be detrimental to long-term success.