The more customers you have, the more your company grows, right? So, to kickstart growth, what your company needs is more customers?

Actually, the answer to these questions is often no. 

Many companies make these assumptions, only to find that all the effort they’ve put into creating new client relationships has failed to improve their profitability or drive growth. Even if they have managed to add new customers without losing any existing relationships, more customers do not always mean increased profits. 

Moreover, a tunnel vision focuses on gaining new customers often leads companies to take their eye off the ball and neglect well-established relationships, corroding loyalty and allowing competitors to swoop in and take advantage. 

In a world where we all live in a culture of racing towards the next hot new thing, businesses need to take a step back and consider the value in the most valuable asset they already have: their existing customers. Often, it’s the untapped potential in these relationships that has the greatest scope for delivering the most growth, often with less effort and reduced risk. 

What’s Wrong with Chasing New Customer Relationships? 

In principle, new customer relationships are a good thing. The more customers you have, the greater the likelihood to make a sale. 

Some of the common issues with those new customer sales, however, are the amount of effort involved, the amount of increased value it generates for your business and the level of resources used in the process. For many businesses, the holy grail of bringing on a new customer leads to a disproportionate amount of effort to generate relatively small sales. Often these sales are made with modest margins too, because the focus is firmly on getting the new customer to buy, rather than thinking strategically and long-term about what the relationship is worth. 

Meanwhile, the potential for an existing customer to buy more at an increased margin may be overlooked. As a result, in this scenario, not only is the value of the new customer low, but the new relationship can actually reduce growth potential by masking more substantial opportunities. 

Indeed, where new customers are ‘bought’ with introductory deals, this impediment to growth can be even greater, because the new customer will not want to step up in terms of cost without any perceived increase in value. But if you increase your prices to make the relationship more sustainable, you could end up being undercut by a competitor. 

Why Do Existing Customer Relationships Create More Value? 

It’s true, of course, that widening your customer base reduces your exposure to risk because revenue is less dependent on a core of lucrative relationships. It’s equally true, however, that nurturing existing, profitable relationships also reduces risk. 

The key is to transition high value customer relationships from a transaction-led dynamic, where the customer simply buys from you on price, as they might from your competitor to a loyal advocate dynamic, where they value you to a point that supports loyalty and recommendation. In this way, existing relationships not only become more profitable, fuelling business growth, they also become inherently less risky, ensuring that growth is more predictable and secure. Equally as important, customers that become loyal advocates actively contribute to your growth by recommending you, allowing you to achieve increased value from your existing customer relationships while enabling you to attract new customers with much less time and effort. 

How To Leverage More Value from Existing Customer Relationships 

Transitioning a customer from a transaction-led relationship to becoming a loyal advocate requires planning, analysis and clear, deliverable goals. 

The planning process begins with an analysis of customers’ profiles, involving a deep dive into how long the relationship has been in place, what they buy from you, where there is scope for them to buy more and what the obstacles to increased sales value have been so far. Only by understanding your customers in this detail can you really plan strategically to drive growth by focusing your efforts on the customers with the biggest growth potential. Just as in every other aspect of commercial strategy, it’s important to consider both risk and reward, picking off the low hanging fruit where possible. 

Once you have mapped out your goals for which customers to develop and what you want to achieve, the next step is to decide how you’re going to make them happen. This is another area where many companies fail to think strategically, resulting in an unclear proposition. 

Rather than focusing on what you would like to sell to your target customers, it’s important to think about what they would like to buy and why. By understanding what motivates them and what they want to achieve, you can build a narrative where your product or service answers their needs. This is a critical element to achieving a customer journey that is tailored to the individual customer’s experience and embeds value in their relationship. 

Continuous mapping for a Successful Customer Journey Experience? 

There is no single blueprint for a customer journey experience because it needs to be tailored to the needs and potential of each customer. It’s also important to consider that the customer’s needs and potential may change over time, so the customer journey experience needs to be agile enough to evolve with the relationship. 

Creating a flexible customer journey experience that responds to different milestones in each relationship enables you to demonstrate to each customer that you understand their needs and are committed to meeting them. This not only creates value for your business but makes the customer feel valued, nurturing loyalty. 

CJX Business Services specialises in helping SMEs across all sectors to map customer experience journeys and achieve growth by building on established relationships. It’s all about unlocking the potential of the customers you already have and leveraging them to support sustainable growth. 

Want to learn more?  Please contact us for a free business consultation at info@cjxbusinessservices.co.uk