In order to succeed in the long-run you must continuously grow your relationship with your customer. Growth only occurs when both parties increase their investment in each other; i.e. your customer buys more products and services from you and your organizations.
Now that your customers are loyal to your brand and advocates of your company’s offering; it’s time to get them to increase their investment, buying more products and services from you. Some basic levers for Customer Expansion include:
The first and simplest form is simply by getting your customers to renew their contract. Believe it or not, relationships don’t last forever. If your customer agrees to spend one more year working with you and your team, consider that a success. You’ve successfully signed your customer on for one more year of service and thus will benefit from one more year of revenue.
Feel free to experiment with discounted annual rates. This way, you’ve secured one more year to continue nurturing the relationship and identifying additional pain points you can serve in the future.
Up-Selling / Cross-Selling
Then comes direct sales. This is when you actively sell new opportunities to your customers.
Up-selling is when you sell your customers ‘up’ on an existing product/service; for example getting them to upgrade from a basic to a premium plan.
Cross-selling is when you offer your customers alternative and complementary services to your customers.
The key to successful up-selling and cross-selling is to be in tune with your customer’s needs and priorities.
If your customer is successfully growing, they might soon grow out of the basic plan they signed up for and need a premium plan; with more licenses and increased service.
As you learn about additional problems that your customer is experiencing, find opportunities to up-and cross-sell additional products/services to address those underserved needs.
Joint Ventures & Partnerships
Joint Venture: “a commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities”
Consider it a joint mission to tackle a new frontier between you and one of your customers.
Joint ventures are great ways to partner with an existing customer and together co-create a new product or service. In return for your customer providing deep industry expertise and in-depth research opportunity; you can reward them with exclusivity, premium benefits or a great pricing scheme.
The main idea is that if your customers are willing to tackle new projects with you, you’ve successfully expanded your customer offering and have increased the opportunity to sell new products and services in the future.
The goal of this post is to provide you with some strategies for expanding your existing customer accounts and leveraging the power of Negative churn, allowing your enterprise to grow and expand their revenue at a marginal cost.
Let me know what you thought of the post. Cheers till next time!