In the previous post I wrote about the importance of understanding your current and prospective customers, and being effective at reaching them. The size of your potential market, and your assumptions about how many potential customers you can expect to win, defines the number of customers in your growth plan. That’s quantity. But you also need to look at the amount of revenue per customer, and the cost of acquiring and serving each customer. That’s the quality side of your growth plan. As you build your growth plan for 2013 and beyond, here are some ways that your knowledge of your market can ensure greater success.
• Can the revenue per sale be increased by the way that you package your product or service?
• Can the number of sales per customer, or the length of the customer contract, be increased by the way that you present your product or service?
• Is there an opportunity for follow-on sales to existing customers?
• Is there a premium level of service that you can deliver – faster, more tailored to their needs, or with a higher service level guaranteed?
• Do you know what it costs to acquire a new customer? Does it vary by type of customer, or by sales channel?
• Can you tell whether you are making a better profit on some customers than on others?
• Do you know which products or services are likely to produce repeat business or longer customer relationships?
• Do you have new products in the pipeline that are likely to drive growth among certain types of customers?
Everyone knows that they need to focus their sales and marketing on their target market, and must achieve high levels of customer satisfaction to succeed. But the foundation of your growth plan must be to understand which customers provide you with the highest profit margin, and how you can best serve them and retain them. Only then can you focus your time, energy, and resources to achieve the greatest success for your business.