A fun fact:
Around 80% of your sales come from 20% of your customers.
This means that more than likely, your next sale will come from someone who has already done business with you. We have all heard it before, so before I share how you can make this work for you, here is some history on this 80/20 phenomenon, also know as the Pareto Principle.
Back in 1906, Vilfredo Pareto learned that 80% of Italy’s wealth was held by only 20% of the people. Then one day, after examining his garden, he also realized that 20% of his pea pods accounted for 80% of his pea crop yield that year. So, this got him thinking, and not long after, the “Pareto Principle” was established. This principle can be applied to any business.
It’s know also as the 80/20 rule.
This little-known principle sheds a lot of understanding on how businesses should be run. Rather than putting all your energy into new business, you would be wise to spend 20% of your time recruiting new clients and 80% of your time following up and servicing people who have already given you business.
At this point with the client being happy, you’ve already removed the first barrier. At this point, up-selling current customers should be natural. This is however, as long as you are proactive in following up and providing top-notch service.
How can this work for you and your Business?
Imagine, about 20% of your customer base is just waiting for you to offer them something new. Except you may not about it yet.
If you’re not following up with your existing customers, you’re actually passing up 80% of your potential business. It happens in a lot of businesses. We get busy and jump to the next client.
However, if you take a fresh point of view on this, and followup, instead of having to work on planning, advertising, promotional activity to get new customers in, you can reap the rewards with exciting customers by figuring out their “lifetime value.”
Here are some things you can do to keep you in the “front of mind” phase with them:
- Holidays and Birthdays: This is a PERFECT time to send over a thoughtful gift or even a simple personalized email. There are so many companies out there that will automate this process for you. More importantly, how do you feel when you get something like this?
- Attend events your Clients are at: Make sure you take the time to attend and show your support for any of your customer that hold annual charity events or various types meetings. This will make them remember you for sure!
- Renewals: When it comes time to renew with them, this is a great time to touch base with them and show your heartfelt appreciation for their business, confirm their satisfaction and their needs are still being met. This is when most people lose their clients, if they are not a happy client. Use the opportunity to turn it around.
- Incentives: Show the client you value them and all they do for your business. By providing a gift incentive or discount can go a long way in terms of future revenue from these clients.
- Call or connect them often: Check in with your customers and ask them how the product/service is. Good or bad, take both and take time to listen. This can help you in so many ways, including finessing your product or service to be even better. This can be via in person, a call or even a newsletter that goes out every month.
- Great service: This goes without saying. By providing the best you can to for your Clients is THE best way to ensure customers will remain loyal to you, EVEN when competitors can beat you on price. Plus, you’ll be surprised at how much of an advocate customers you do this with, in terms of providing referrals to your business.
The 80/20 rule will make you successful or break your business down in the same fashion. Use it to your advantage and focus it on all aspects of your Business and life.
Not sure where you stand in your Business? To learn more about the fundamental skills needed to succeed in sales and how to teach them to your team, check out our Free no-obligation webinar: “How To Predictably Increase Your Sales by 33% In 90 Days Or Less!”