Yes – thats what I said. BUY from your friends. I say so because I saw a marked difference in the way my business grew when my friends decided to support it.
Dont limit your support to good wishes and motivational talks and FACEBOOK LIKES. Your friend is certainly a motivated person – why else would she decide to be an entrepreneur to begin with. Surely, she has a plan, a strategy , business objective and tons of self – motivation. Help her spread the word out about her work.
Something you may not know is everytime she goes to an investor , they tell her – her first few hundred customers would come from friends and family. And surely, investors are not bluffing it. They have seen the trend and they know this is how it goes. Why should your friend not get the same level of support from you that quite few entrepreneurs around the globe are getting from their friends.
Generally, its our tendencies to expect discounts and benefits from our friends if they own the business for the products / services we are interested in. And its not bad. Ask for discounts from your friends. Ask them for customizations you need. Chances are they are in a better position to serve you in those ways.
Lot of times the situation gets comparable to elections, where lot of good people don’t vote thinking either they cant make a difference or they think someone else is taking care of it for them. Instead of not doing business with your “startup” friends – for any of such reason, do it for the SIMPLE one – You want your friend to succeed and if friends around the globe are making difference in successes or not of startups , then you dont want to be on the other side of the fence wishing you should have done all you could to support her in time.
Word of caution : If you think the product / service is truly something that you dont see much use of – walk upto her and tell her. Help her see your perspective. This is as important for her to know.
Organizations that make sales to potential customers and then move their sales team to look for more customers could be missing on the value that could potentially be generated from post sales service and product offerings.
One could not only build brand loyalty and retain more customers but also generate more revenue through support / maintenance activities – And also by suggesting and selling products that could be a natural extension of sold products and of interest to the clients. One of the key tool at hand that could be of significant help is customer feedback and how the team is reacting to it. Its important to hear out the customer and resolve issues in the existing product before trying to sell new product to the same customer or selling same product to anyone in the existing customer’s network.
Consider these stats mentioned below, on recurring revenue opportunity available with strong customer retention and after-sale maintenance and services annuities, which are actually being reported from a blog on Customer Lifetime Value:
• It costs 7 times more to acquire a new customer than retain an existing one (Source: Bain & Company)
• A 5% increase in customer retention can increase profits by 25% (Source: Bain & Compay)
• The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. (Source: Marketing Metrics)
• 30% of new products are not covered by contracts and 50% of original contracts are not renewed. (Source: McKinsey & Co.)
• Companies growing recurring revenue grew revenue 20% faster and enjoyed 25% higher profit margins than their peers.
• Recurring revenue on average accounts for 30-40% of revenue and 50% of profits for technology companies (Source: Morgan Stanley)
• Customer profitability tends to increase over the life of a retained customer (Source: Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy)
Efforts undertaken to add more and more logos on the business list are good investment, however, the real measurement of how the business performed, is not limited to one time sales with a customer and realistically covers the overall value generated during a customer’s lifetime.
Focusing on intangible services and benefits are as important as focusing on the tangible ones. A CEO of a very successful kitchen appliances manufacturing unit mentioned to his sales team : You are allowed to drop a call from a new customer or me or anyone seemingly important , but do not drop a call coming a from an existing customer who bought a product from you. Speak to them, support them , take necessary action until the customer is happy again.
While buying a cake I look at the pretty designs of icing on it, but what defines whether I comeback to the same vendor to buy another cake is the after taste it leaves in my mouth. Though, once I go back to the shop I may again start comparing the icing designs — trusting that cake under it is worth it!! 🙂 🙂