Is upselling to existing customers more important than finding new customers?
Upselling to existing customers is something that most large, successful companies do very well.
Think of Amazon as an example: Every time you search for an item, you are shown similar items that are relevant to your interests. They even offer bundle deals in an attempt to entice you to purchase multiple items instead of the one you initially searched for.
The same happens on the High Street: “Would you like fries with that?” and “Would you like to go large?” are all prime examples of upselling.
But is upselling more important than finding new clients? There’s no simple answer, but let’s explore the issue a little further.
The Benefits of Upselling
The main benefit of upselling is that you are generally dealing with a “warmer” sales lead than a brand new customer.
Have a really good think about whether you’re missing out on upselling opportunities. For example, if you take over a site, do you work with what’s there, or do you rapidly try to move the company onto the products you prefer to use (and gain revenue streams from selling?)
One mistake that many fledgling IT businesses make is to be too timid in their sales approaches. In fear of scaring off customers with high quotes, they hold back on suggesting things that clients may want or even need.
This is a bad strategy. It makes far more sense to clearly lay out your customer’s options.
Let’s take laptop encryption as a random example: Installing some encryption software could earn an extra couple of hours consultancy, and perhaps some commission on reselling the solution. Timid IT firms simply won’t mention it, for fear of the client thinking they are trying to extort excessive fees for configuring a new laptop.
Even if the client does think this, it’s not a problem. Simply explain to them that without encryption, a laptop left on the seat of a cab is a security breach waiting to happen, and that anyone could remove the hard drive and access the data. Then leave them to make the decision.
Why New Customers are Still Crucial
Mastering upselling shouldn’t be used as an excuse to ease off the “real” marketing slog. You could sell every imaginable service to a specific customer, only to see them disappear from your client list if their business fails or, quite the opposite, if it succeeds and is bought out by a larger firm with its own IT department.
For this reason, you should never allow your pipeline of fresh clients to run dry. You never know when a client may disappear, and there’s always some churn of existing customers even if you do nothing wrong at all.
So, going back to the original question, upselling isn’t more important but is equally important. Put equivalent effort into both sales techniques, and you should see your business grow in two different directions – and what could be better than that?