Have you ever struggled to sell more to existing customers? In this episode, Paul shares several tips and explains why you should focus on existing customers versus prospects.
Did you know that top-achieving salespeople spend more time selling to their existing customers than to prospects?
It’s more important to sell to existing customers than to new prospects. Research shows that it is more profitable and it’s easier to sell to existing customers.
When you’re selling to existing customers, there is a right way to do it and a wrong way. Your attitude matters when you’re selling to existing customers. Don’t ask yourself, “How can I sell more stuff to this customer?” Instead ask yourself, “How can I…”
Don’t position yourself like every other seller. Don’t ask the customer for more projects to quote. Instead ask the customer for more…
“At the end of every single sales call this top achiever would ask customers this one question…” This top achiever believes that this “one question” has created most of his success.
“Your goal is not to sell, sell, sell or demo, demo, demo. It’s to create more value.”
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How do I sell more to existing customers?
(Transcribed from podcast)
Today, we’ve got a great question. This question came to us from a recent training seminar. We were working with a group selling for a major manufacturer. You would know their name if I mentioned it. We had a great discussion about selling to existing customers versus selling to new prospects. One question that came out of that conversation was, “What’s the best way to sell new products or additional products or services to an existing customer?” So that’s what we’re going to dive into on today’s podcast.
There are a couple things we need to talk about first. Why should you focus on existing customers versus new prospects? Or, should you focus on new prospects versus existing customers? That really depends. It depends on your territory. It depends on your business. It depends on what direction you’re getting from your management team. One piece of advice, if you have a well-established territory, I recommend spending most of your time trying to build up your business with your existing customers. Now, if you are brand new to a new territory where it is heavily under-penetrated, you need to make sure that you’re out there prospecting more.
It really depends on the dynamic of your territory, but I always recommend focusing on existing customers first versus prospects. I know a lot of sales experts out there are talking about how important prospecting is, and I get it. Prospecting is important. But our research shows that top-achieving salespeople spend most of their time—80 percent of their time—trying to sell to existing customers versus just trying to sell to a new prospect. Let’s talk about why it is so important to sell more to existing customers.
Number one. It’s flat out easier. It is easier to go sell an additional product or a new product to an existing customer than it is to go out there and sell it to a new prospect. There was a great book called Marketing Metrics, and what they found is that if you’re trying to sell a new product or service to a prospect—someone who’s not working with you now—the probability of success is between 5 and 20 percent. However, if you’re going to go out and try to sell that same product to an existing customer, your likelihood of success jumps up to between 60 and 70 percent. It’s flat out easier.
The journal of marketing research found that if you’re trying to close a sale on a new prospect, it’s going to take you about seven attempts to do that. However, if you take that same type of sale and go to an existing customer, it’s only going to take you three attempts. So it’s easier to sell more to your existing customers than it is to go out there and find a brand new prospect.
Now, prospecting is important. I don’t want you to get the impression that it doesn’t matter. But, selling to existing customers is more critical. It’s still important though. As I mentioned, top achievers spend 80 percent of their time selling to existing customers, but, that also means that they’re spending 20 percent of their time going out there and prospecting.
Here’s what 20 percent looks like. That means one day out of the five-day work week, they are out there selling to new prospects. That means that one out of every five sales calls is to a brand new prospect. So prospecting is important, but, make sure you’re focusing on your existing customer.
Now, let’s talk about what gets in the way of selling more to existing customers. One thing is that salespeople are obsessed with new business. And so our sales managers, by the way. Right? Maybe it’s because the grass always looks a little bit greener on the other side. A salesperson thinks, I’m better off spending my time over there. That’s a better opportunity than the one that exists right here next to me that’s already buying. So the grass looks a little bit greener. Management also applies some pressure here. There’s an obsession with either gaining market share, or there’s an obsession with bringing in new accounts. But, the reality is, it’s more important to protect and grow your existing customers.
It’s also more profitable. For example, think about this. You have an existing customer that you are familiar with. You understand how they do business; they understand how you do business. You know the cost to serve that customer goes down over time. However, margin tends to increase as well, so you get a bigger spread. It’s actually more profitable.
The other thing, and this one shocks me, but I hear it quite a bit. Salespeople tell me, One of the things that gets in the way… I don’t want to appear to be too greedy. I feel like I’m asking for too much when I’m trying to grow with my existing customers. That’s just a negative attitude. You’re not being greedy. You’re out there to help your customers to solve their problems, to create value for them. That’s the mindset we need to have going in.
With that being said, let’s talk about how we can go out there and sell either new products or additional products and services to our existing customers.
We’ve got to adjust our attitude before we go in. We can’t go in with the mindset that says, I am going to sell more to this customer. How can I sell more stuff to this customer? That’s the wrong mindset. In fact, that’s a seller focused way of thinking. Our mindset going in has to be, How can we create more value for this customer?
I remember several years ago when I was in sales, I was making a call with my sales manager. Before the call, we were talking about the objective, and I said, “We’re, pretty much getting all the business we can get from this customer. There’s one product I’m going to go in there with today.” I had my focus completely on that one product. When I walked in there and I started showing that product—I had my blinders on and that’s what I was focused on selling—I ended up missing out on some other opportunities that existed all around me.
When we got back in the car, we’re debriefing the sales call and my sales manager said, “You know, Paul, you brought in that one tool, and that’s what you were focused on selling. That was your goal. But you missed out on two or three other opportunities that I observed just as we were walking around.”
The mindset cannot be, how can I sell this product, or, how can I sell more stuff to the customer? It has to be about creating more value for the customer.
That brings me to the second tip. Identify problems to solve. If you’re trying to sell a new product or a new service to an existing customer, you’d better understand what problem this solves for them, or you better understand what they’re currently doing and how you can show them a better way. We’ve got to identify new problems to solve. As your mindset when you’re going in there to try to provide additional products and services or new products and services to your existing customer, don’t just focus on one product that you want to sell. Focus instead on the problems that your customers are facing and how you can help them overcome that.
A colleague I worked with several years ago was sharing some of the secrets to his success. He was one of our top performers at our company. And one of the things he said is, “I do a lot of the things you would imagine. I plan calls. I ask good questions.” But, he said that one of the reasons he’s so successful is because after every single sales call, he will ask the customer, “In addition to what we talked about, are there any other problems that you are experiencing?” And he said by asking that question all the time about problems that they’re experiencing and how we could help, people started coming to him when they did have a problem. And where there’s a problem, there’s an opportunity for you to create value.
Another thing I’d recommend, anytime you bring in a new product or a new service, your role is to really educate that customer; make them aware. Customers don’t know what they don’t know. If they’re stuck in the way they do things—if they have an outdated product or an outdated methodology of doing something—they might not know any different. And so, your goal isn’t to go in there and just sell, sell, sell, and demo, demo, demo. Instead, your goal is to ask questions, understand what they’re currently doing, but also educate that customer on a better way.
When you’re trying to sell more to existing customers, you have a few things working in your favor. Number one, you’ve already built some trust, which is a great thing. You’ve also built up some solid relationships, and all those are going to help you. The key is not going in there being seller focused. The key is being customer focused, understanding what their needs are. The goal is to have the right attitude going in. Not saying, “How can I sell more?”, but, “How can I create more value for this customer?”
Your goal is also to educate the customer on new ways of doing things, and understanding how they’re currently doing them. And again, make sure that you’re focusing on problems to solve, not just projects to quote.
Make it a big day!