In school, I learned there are essentially four ways to grow your sales. Although the tools and techniques you use to get there have changed over the years, the basic strategies have not. Large and small businesses have four basic choices when it comes to growing their sales:
1) Sell more of the same product to your existing customers.
2) Sell new products to your existing customers
3) Sell your existing product to new customers
4) Sell new products to new customers.
There is no one right approach. There are times when each is a perfectly logical choice for a business. But to be successful, you need to match your marketing strategy to your sales plan.
Sales Strategy #1: Sell More to Existing Customers
If you have capacity constraints and a fairly stable customer base, you can build a successful model around selling more of the same product to existing customers. Businesses in this category include personal trainers and hair stylists. Once they have an established book of business, they are not looking for lots of new customers. Small manufacturing companies with a few long term contracts may also be in this category.
Marketing Strategy: Focus on Exceptional Customer Service
If this is your sales strategy, then your marketing needs to be focused on maintaining these long-term relationships. You need to be beefing up your customer service and making it easier and easier to do business with you. Investments in streamlining and simplifying your order process will pay significant dividends. Training for customer service employees and customer loyalty programs will keep these valuable clients coming back time and time again.
But what if you are not generating enough revenue from your existing customers and products? The next two sales models rely on very different tactics to achieve the goal of increasing sales. One relies heavily on innovation and cross-selling, the other on prospecting.
Sales Strategy #2 Sell New Products to Existing Customers
Companies with a broad product line often assume all their customers know what they do. In many cases, customers who buy one product or service from you may not be aware of other products and services. Significant increases can be achieved by simple cross selling.
McDonald’s excels at the art of cross selling. By teaching their sales team to ask one simple question, “Do you want fries with that?” they dramatically increased their overall revenues.
Marketing Strategy: Cross Selling, Bundling, and Customer Information
When you want to sell more products to the same customers, you must continuously invest in innovation and new product development. Then you must close the loop and make customer aware of these new products. Marketing strategies like cross selling or bundling – like combining burger, fries and a drink in a meal deal – makes customers more likely to purchase the complete package from you.
Sales Strategy #3 Sell the Same Product to New Customers
If you have a narrow product line or you are in an industry where customers only use a limited amount of your product, growth will come from new customers.
Companies which sell software as a service typically fall into this category. They may have essentially one product and after the initial purchase, renewals are fairly simple if the product does what they promise. Their biggest expense is in building brand and product awareness.
Marketing Strategy: Find New Customers
When finding more customers is the objective, traditional advertising and promotion vehicles are most effective. When you need to spread the word, billboards, direct mail and PPC help introduce your product. Free trials, coupons, give-aways and other purchase incentives encourage that first purchase.
Sales Strategy #4: Sell New Products to New Customers
This is the strategy many new business owners fall back on. As they try to find those all important first customers who will define the shape of their business, they jump from product to product (or service to service) with an “I can do that” attitude.
Marketing Strategy: Define Your Customer
If this is your sales strategy, the best marketing advice may be to go back and research your customers. While this yes I can do that attitude works as you kick off a business it is not sustainable in the long run. And even established businesses can’t be all things to all people.
Which marketing strategy is best?
There isn’t one right answer for every business. It will depend on how many customers you have and how many you want. Select the growth strategy, solve a problem and the rest of the pieces will fall into place.