Sometimes, client acquisition is a costly path to go down. It requires building a sales team and implementing a marketing strategy to reel in new clients. Meanwhile, everybody around you has their version of how you should be doing this. But ultimately, if you want to improve your sales revenue, then you have to invest in gaining new customers, cross-selling, or customer retention. Client acquisition may initially be costly upfront, it does have its perks in the long-run.
Whether you're operating in an emerging market or an old one, each presents different challenges to your sales strategy. You either focus on going after as many available customers or you do your best to hold on to the ones you have. Each circumstance is equally fun, but unique because you are challenged to engage your competition in a different way. Eventually, the dust settles in every industry and competitors begin to focus on customer retention and stealing your clients away.
So What Should You Be Doing?
In our research, we found that most companies have got it backwards once their markets have matured! Far too many CEO’s, VP’s of Sales, CMOs continue to rely on what worked in the past rather than adopting to what will work in the future. They continue to focus on AXR (Acquire, Cross-sell, Retain) versus RXA (Retain, Cross-sell, Acquire). When you are in a mature market, reversing your thinking is critical to finding sales growth. You are challenged to shift away from aquisition to protect and maintain the relationships you have. You should be focusing on RXA to yield greater returns.
A True Story About Finding Sales Growth
Not so long ago, one of our partner's clients was having trouble hitting their revenue growth targets. They were earning $16 million in annual sales and had a goal of growing to $20 million. To reach their goal they needed to make $6.1 million in new revenue, not $4 Million. Don't worry, my math is correct because they had an 85% retention rate in revenue. That low retention rate was costing them $2.3 million in lost business every year before they even started. All their focus was on client acquisition, and it was causing their existing client relationships to suffer. To make matters worse their cross-selling efforts were only netting an additional $0.2 million in revenue. They needed a plan to make up for the additional $2.1 million they needed to earn to reach their goal of $20 million in annual sales.
Working with our platform and believing they needed to change they were able to redirect their resources and efforts to focus on building a world class retention and cross-selling culture that could achieve growth much faster through less work. By implementing our 1:1 methodologies, our partner's customer improved their client relationships and even exceeded their growth goal by earning $26 million in sales, $6 million above their goal. Our partner was featured in an Inc. Magazine story “Fast Growth in a Slow Economy”. To add to that, the following year, our client continued to see success with their RXA strategy by hitting $36 million in sales.
Build Client Acquisition, But Remember What Matters
When acquisition becomes too costly, then learn to invest in your client relationships. It's the key to finding success in B2B sales. Learn who your clients are and what their business is so you can start creating better value for them. Make it hard for them to let you go or switch to another competitor by learning to ask your customers questions. The kind of questions that lead to solving problems you never knew existed. Having healthy client relationships is a great differentiator to have over your competitors regardless of what market you're in. Remember that relationships matter more than just sales dollars.