Hello and thank you for visiting my blog.
One question all companies have is;
“How much are loyal customers worth? And how much should we spend to make them loyal, and keep them loyal?”
This same question applies to you as a salesman as well.
You might have a different approach, more along the lines of; “How much are loyal customers worth? How much time should I spend on each customer to make and keep them loyal?”
The difference between us and companies is that are currency is our time and energy. Providing a great service and follow up is the value we can provide.
So the question that faces us all is;
“Are customers worth my time or am I better off just selling to new customers?”
This depends on what industry and what type of sales you are working with.
In the short run, it is always easier to make money off new customers. Reselling to a customer takes a lot of time.
But a loyal customer is often worth a lot more and will buy in larger and larger quantities.
There is a limit to everything though.
There is a limit to how many sales you can make in a day. Limits to the size of those first time orders and therefore you have a limit to the amount you can make off new customers.
Recurring customers also have limits.
There is a limit to how many customers you have time to serve.
The difference is that, depending on industry, there often isn’t a limit to the size of the orders you can make on recurring customers.
You might even have to let smaller or time consuming customers go in favor of larger customers that are willing to spend more on your products.
This is the value of having many loyal customers; it means there is no limit to the amount of money you can earn.
There are of course a lot of other things to way in when trying to optimize your earnings.
If you only work with first time customers, you will have to work at a much higher pace, pushing yourself every day as you don’t have anything to fall back on.
Every day will be about kicks. The kick you get every time you push in a new close. Many salesmen don’t work for the money; it is the kicks they are after.
When working with recurring customers you will have a little more laid back work day. You will have to spend time with your customers talking about other things than business. More time speaking about family, friends, hobbies and so on.
The tempo in working with recurring customers is slower and you spend more time speaking to people and hopefully making a few friends along the way.
As a new salesman you have no other choice but to work with new customers. But you can make the decision to work towards having enough loyal customers to slow down or if you want to continue working with new customers, or perhaps a combination.
Please share your thoughts about loyal customers and the difference between working with loyal customers and new customers in your industry.
//Daniel M. Wood