Revenue growth from existing customers

Mar 2010
17

Revenue growth from existing customers

 

 

At the end of every year, most businesses (well at least the better ones) will generally make a plan on how to achieve growth for the next year. More often than not, companies look to achieve this growth through new customer acquisition. Now, in order to have a thriving business, new customer acquisition is imperative. However, what about the ones (customers) you already have? For example, if you are an MSP (Managed Service Provider) offering a range of services, you need to ask yourself – how many of my existing customers are buying more than 50% of the services I offer?

Let’s look at an example of an MSP that has 5 services to offer, with 200 paying customers using 1 or more of these services. To keep this example simple, let’s say that each of the 5 services cost $100/month. Now, if less than 100 of these customers are using 3 services or less, would we not want to know why? Even if 20% of these 100 ended up buying an additional service, it would translate into $2000/month in additional revenue to the business.

Unfortunately, through past experience I’ve realized that in many cases customers don’t even know that you offer a particular type of service and hence end up buying from someone else. It’s quite a shot to the ego I know, but a good learning experience nonetheless.

At the end of the day, businesses are often surprised at the opportunity they have on hand. So remember to ask yourself – Are we maximizing the potential of our existing offerings with each and every one of our current customers? Do they know we offer additional services? Imagine the results you can achieve when you bundle such a strategy along with one of acquiring new customers!

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