5 Reasons to Prospect within Your Existing Customer Base (Entrepreneur)
5 Reasons to Prospect Within Your Existing Customer Base
Business and romance both come with high and lows. And like most couples over time, commerce often shows a tendency to take certain things for granted. Odds are you’ve heard the expression, “The honeymoon is over,” in both contexts.
The same analogy applies to the topic of new vs. existing customers. Anyone who works in sales appreciates how difficult it is to secure new clients. Sales cycles with new accounts are somewhat analogous to dating (early discussions), getting engaged (a committee agrees to evaluate your offering) and getting married (making buying decisions). At some point after the honeymoon (implementation), things settle down into a different rhythm. Contact with key executives might become more limited. If and when key players leave the company, sellers might not establish relationships with their replacements. Ultimately, your steady can become vulnerable to being courted by new vendors, and you could lose the account.
Painting with a broad brush, some clients feel as if they’re being taken for granted. In certain cases, they are. Some sales teams have an underlying attitude that if clients need something, they’ll contact the seller. A few years ago, one of my colleagues spoke with a senior vice president of sales who recently had visited a satisfied long-time client. During the call, the executive indicated he’d made a buying decision for an offering. The sales leader inquired why his account rep wasn’t asked to present a bid as well. The client’s answer was a painful one: He didn’t know they competed in that space.
I define prospecting as taking key players from latent to active need for business outcomes achieved through an offering. The vast majority of sellers view business development as an activity limited to finding new accounts. But most key players have latent needs. The number of players actively looking to make buying decisions is much, much smaller. Note this definition of prospecting makes no mention of whether the key player works for a client or a prospect. In either situation, you’re working to uncover new opportunities to offer your business solution.
Finding advantages in existing accounts.
New accounts present several challenges, including the need to establish relationships with new people, prove your capabilities, establish credibility for your company and negotiate new agreements.
On the other hand, few of those barriers apply when you work with existing clients. Prospecting within the customer base offers at least five advantages:
- Win rates for securing add-on business should be significantly higher.
- Buying cycles are much shorter.
- Incidents of “no decision” are likely less frequent.
- Key player contacts already are established.
- Contracts/legal agreements are in place, making you the incumbent vendor of choice.
It’s dangerous to wait for clients to call you with new requirements. As an incumbent vendor, you should focus on taking key players within your customer base from latent to active needs for add-on offerings. This approach could be your entry to even higher levels within the organization, beyond the decision-makers with whom you secured the initial order.
Paying attention to organizational changes.
My suggestion? Pay as much attention to your existing clients’ organizational charts as you did when you courted them as prospects. Few things are more disheartening than losing a client to a vendor who capitalized on the opportunity to court your client. As you determine how you’ll make this year’s quota, be sure to factor in business you can find within your install base. If you don’t, you’re leaving money on the table.