Many times I’ve worked for managers who have truly believed that the best thing a sales rep could do to generate business was to make a lot of cold calls.
Non-sales people often do really believe that is what selling is. Calling people you don’t know, who don’t know you, who may or may not have a problem, who may or may not have the power to effect change, and if even if they are really interested and you can help them solve a real problem how long does it take to get into their budget cycle to get the money?
One of the issues is that companies often seem place higher value on “new” business than “repeat’ customers. Many believe that adding new customers is the only way to grow.
There is no doubt that new customers are important for growth and should make up a good part of a healthy opportunity pipeline, but when faced with the choice of cold calling or prospecting with an existing customer based I choose the existing customers every time!
Here are five reasons that I focus on existing customers and trust me even the staunchest “cold-calling” advocate will have to give you some props when you are generating twice as many $’s in half the time versus your “tele-marketing” peers.
Top 5 reasons why you should prospect for new business within your existing customers:
- You know who to call and they will speak with you.If this is a relatively new customer, or a short sales cycle, then your contacts may be somewhat limited initially. But you should always build from a “win” to finding referrals from your customers. If you’ve done a good job with building rapport then you should be able to get some names internal or external from your contact(s).
- You know their processes, needs, and workflows (so where else you can assist them?). One thing you should always be doing is prospecting and qualifying for new business while you are moving existing prospects to close. For example if you sell a developer tool and a management reporting solution you can try to sell both together (if you can get the Dev Manager interested) up front. But if not you still should ask qualifying questions of the Dev Mgr for the reporting solution as you go through the sales cycle. Be subtle but work them into your discussions where appropriate.Once the developer tool is sold you can leverage the contacts, knowledge, and information gathered to follow up with the reporting manager solution for this customer.
- They’ve bought from you before so you know how their budget process works and the money flows. After your first sale, and even more so after you’ve sold more than one product or service, you will know how their budget process works and how the money allocation happens. More importantly you’ve also started to “train” this customer to give you money. You are now set up as a vendor in their systems and as more departments are generating PO’s for your products and services the more the customer gets used to compensating you to help solve their problems.
- Every new “engagement” deepens the relationship and increases your value to this customer.While you hope that every new problem you can solve for a customer will turn into a closed sale for you, and that should happen more often than not, it is not going to happen every time. But even in the cases where you have discussions with a customer that do not turn into immediate business you still win in the long run. The more contact you have with any customer the more you expand your contacts and reach into their organization. They learn more about you and the solutions you can offer. And most importantly they learn t0 contact you when they have a problem, “Call [your company name] and see if they can help us solve this!”. Companies spend money when they are in “problem” or “growth” mode, and honestly I’ve found them to spend more money and faster for problem solving then growth!
- Keeps you in close touch with your customers (and the market) so you can get in early with new products and opportunities. Sales often is in a great position to provide pro-active market feedback to product development teams which if done early enough can allow your company to create new products and solutions for customers ahead of the competition. Staying close to you customers and the market gives you vision into what your customers need and are willing to pay for.But it also allows sales to provide value immediately with paid services, consulting, and expansion of proven customer solutions into other areas. You should plan for the future (info for product management), but never forget to maximize the value you can provide today. Sell today while planning for the future!
Prospecting for new customers should always be part of your business, but don’t forget to prospect within your existing customer base! Repeat business from existing customers can be the foundation to be being a long time high performing sales rep!
The real deal is that we don’t know how much business is at a customer. We often expect there is less business than there really is. We don’t see an easy way to more revenue at the customer, so we do not farm these accounts. The scary fact is that there is more business than you think, more than you can win. Keep your mind open and just keep asking them how you can help.